Final answer:
The query is incomplete, but true accounting for derivatives involves recording them at fair value initially and using different methods for subsequent measurements depending on their use in hedging.
Step-by-step explanation:
The question "Is true related to the proper accounting for the initial and subsequent measurements of derivatives?" is not complete and lacks context. However, in general, applying the correct accounting principles to both the initial and subsequent measurements of derivatives is crucial. Initially, derivatives are often recorded on the balance sheet at fair value. Subsequent measurements can vary based on whether the derivative is designated as a hedging instrument and, if so, what type of hedge it is. For example, changes in the fair value of derivatives used for cash flow hedges are initially recorded in other comprehensive income, while those used for fair value hedges are directly recorded in earnings.
True, the proper accounting for the initial and subsequent measurements of derivatives is an essential aspect of financial reporting. Derivatives are financial instruments whose value is derived from the value of an underlying asset, such as stocks, commodities, or currencies. As such, they need to be accurately measured and reported in financial statements to provide a true and fair view of a company's financial position and performance. For example, if a company holds a derivative contract, it needs to report the fair value of that derivative periodically to reflect its current market value.