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CTP · Question #152
(Topic 2) A company enters into a cash flow hedge to offset fluctuations in the value of foreign currency transactions occurring in two years. How should the company record the gains and/or losses…
The correct answer is A. The hedged gains and losses are reported in comprehensive income. See the full explanation below for the reasoning.
Question
- (Topic 2)
A company enters into a cash flow hedge to offset fluctuations in the value of foreign currency transactions occurring in two years. How should the company record the gains and/or losses on the cash flow hedge in the current year?
Options
- AThe hedged gains and losses are reported in comprehensive income.
- BThe hedged gains and losses are reported in current period income.
- CThe hedged gains and losses are reported in current period income together with the
- DThe hedged gains and losses are reported in comprehensive income together with the
How the community answered
(34 responses)- A79% (27)
- B6% (2)
- C3% (1)
- D12% (4)
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