ACB, Inc., engages in a forward transaction and is applying fair value hedge accounting. ACB holds the

Question:

ACB, Inc., engages in a forward transaction and is applying fair value hedge accounting. ACB holds the underlying instrument and hedges it by selling this forward contract. During the hedge period, the underlying instrument increases in value by $250,000, whereas the derivative decreases in value by $220,000. Identify the accounting entries required and how ACB's earnings and would be affected? Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...