List some of the criteria laid out by the FASB that are required for a gain or loss on forecasted trans actions (a cash flow hedge) to be excluded from the income statement. If these criteria are satisfied, where are the gains or losses reported, and when (if ever) are they shown in the income statement? What is the rationale for this treatment?
Answer to relevant QuestionsDescribe a forward exchange contract.Agentel Corporation is a U.S.-based importing-exporting company. The company entered into the following transactions during the month of November. Nov. 6 Purchased merchandise from AGT, a Swiss firm, for 600,000 francs. 5 ...Consider the following information: On December 1, 2008, a U.S. firm plans to purchase a piece of equipment (with an asking price of 100,000 francs) in Switzerland during January of 2009. The transaction is probable, and the ...Is a firm required to reconcile net income and net cash flows from operating activities if the direct format is used to present the statement of cash flows?A U.S. company estimated that, in the first two months of 2010, its export sales to a Swiss company would generate 400,000 francs. On December 1, 2009, in an effort to protect against the weakening franc, the company ...
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