Why would companies NOT want to use hedge accounting?

The IFRS framing body IASB is grappling with how to account for hedging activities, and has invited comments till Mar-11 here. Analysts and others demand incisive disclosures while companies groan at the documentation involved. In an ideal world, companies would disclose ALL their risks, the quantum & mode of HOW they are hedging it in a format simple for analysts to extract and derive the 'core' earnings. But this is not an ideal world.

Hedge accounting is voluntary but rationally, companies should welcome the chance to 'match' their hedge accounting with their risk management activities. But, as mentioned by the IASB Staff discussion paper 20C here,  there are equally cogent reasons not to do so namely

• Burden of required documentation of designating the hedging relationship
• And more importantly, users of financial statements can infer from information in management reports or similar information about risk management outside the financial reporting context what the entity’s hedging activities are. To avoid reverse engineering of their unique risk management strategies by competitors, companies may still want  to avoid hedge accounting. 

Takeaway:- The IASB needs to tread a fine line between improving disclosures and scaring away companies.