Firms must designate each derivative as a hedging instrument, or else accounting views the derivative as a nonhedging instrument. Furthermore, firms must designate each hedging instrument as either a fair value hedge or a cash flow hedge. The accounting for nonhedging derivatives
a. remeasures both the hedged item and the derivative to fair value each period and recognize any unrealized gains and losses in net income.
b. remeasures the derivative to fair value each period and include the unrealized gain or loss in other comprehensive income to the extent that the derivative instrument is effective in neutralizing risk. When the firm settles the hedged item, transfer the previously unrealized gain or loss from other comprehensive income to net income.
c. remeasures the derivative to fair value each period and include the unrealized gain or loss in net income.
d. all of the above
e. none of the above
C
You might also like to view...
Rational appeals are most effective when consumers have high levels of involvement and are willing to pay attention to the ad
Indicate whether the statement is true or false
The overriding challenge that confronts today's internal communicators is to convince employees that management not only wants to communicate with them, but also wants to do it in a truthful, frank, and direct manner
Indicate whether the statement is true or false
Janitor Supply produces an industrial cleaning powder that requires 40 grams of material at $0.10 per gram and 0.25 direct labor hours at $12.00 per hour. Overhead is applied at the rate of $18 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?
A. $7.50. B. $7.00. C. $11.50. D. $8.50. E. $25.00.
A civil case generally proceeds as follows:
a. answer, complaint, discovery, trial, verdict. b. complaint, answer, trial, discovery, verdict. c. complaint, answer, discovery, trial, verdict. d. discovery, complaint, answer, trial, verdict.