9. [Cash flow classification] Black & Decker [BDK] reports the cash effects of its derivative financial instruments as fol- lows Except as noted below, cash flow from operating activi- ties includes the cash effects of the Corporation's inter- est rate swaps and caps, foreign currency transaction hedges, hedges of foreign currency firm commitments, and hedges of forecasted transactions.

Cash flow from investing activities includes the cash ef- fects of

a. hedges of net investments in subsidiaries located outside of the United States, and

b. the exchange of notional principal amounts on inter- est rate swaps that swap from fixed United States dollars to fixed or variable foreign currencies be- cause such amounts have been designated as hedges of net investments in subsidiaries located outside of the United States.

a. Discuss whether you agree with: (i) The company's classification of the cash flows from hedges of net investments in foreign subsidiaries as com- ponents of cash flows from investing activities (1) The company's classification of the cash flows from hedges of other hedging activities as components of cash flows from operations Justify your response with reference to the requirements of SFAS No. 95.

b. As an analyst, state where you would classify cash flows from hedging activities related to net investments in foreign subsidiaries. Justify your answer.