what is a cash flow hedge 
a cash flow hedge is used to reduce the exposure to volatility of cash flows from an existing asset or liability or a forecasted transaction in order to qualify for hedge accounting the potential changes in cash flows from the asset liability or future transaction must have the potential to affect the company s reported earnings examples of items that may qualify for cash flow hedging include variable interest rate assets or liabilities assets or liabilities denominated in a foreign currency forecasted purchases or sales and forecasted debt issuances 2