Object documentationDollar Offset Method

 

You use the dollar offset method to check the effectiveness of a hedging relationship.

A hedging relationship is effective when the ratio of the changes in fair value of the hedged item and the hedging transaction falls within a specific range. This range is specified in Customizing.

For the dollar-offset-effectiveness test, the result must be between a range of 80-125% to be classed as effective.