CFM27100 - Accounting for corporate finance: hedging: IAS 39: non-qualifying hedged items:

Items which cannot be designated hedged items

Certain items cannot be designated as hedged items.

• An entity’s own equity instruments;
• Held to maturity investments - given the intention is to hold the instrument to maturity, interest rate or early prepayment risk would not impact profit or loss, and therefore cannot qualify as a hedged instrument. A held to maturity investment can be a hedged item for foreign currency and credit risks;
• Derivatives (except purchased options as the hedged item in a fair value hedge where a written option is the hedging instrument);
• A net position (e.g. the net of all fixed rate assets and fixed rate liabilities), rather than a specific item;
• General business risks - for example a firm commitment to acquire a business in a business combination cannot be a hedged item, except for foreign exchange risk, because these other risks cannot be specifically identified and measured.