Question: Reporting forward exchange contracts continues to be a significant issue in accounting for foreign currency translation adjustments. Required: a. Describe a fair value hedge and

Reporting forward exchange contracts continues to be a significant issue in accounting for foreign currency translation adjustments.

Required:
a. Describe a fair value hedge and discuss how to account for forward exchange contracts that are entered into for fair value hedges.
b. Describe foreign currency fair value hedges and discuss the accounting for these types of hedges.
c. Describe foreign currency cash flow hedges and discuss the accounting for these types of hedges.

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