A derivative is a financial product whose value is based on an underlying asset, liability, or variable. Hedging is an investment strategy to protect another investment. Derivatives are popular for reducing financial risk and are common on big companies’ balance sheets. However, understanding their impact on business finances is challenging for accounting and auditing industries. This course covers the financial accounting and reporting requirements for derivatives and hedging activities, as prescribed by ASC Topic 815, with a focus on fair value, cash flow, and net investment hedges.