A UK company hedges its U.S. dollar purchase of equipment from a U.S. supplier using a forward contract exchanging pounds for U.S. dollars at a fixed rate. The forward qualifies as a hedge of a forecasted transaction. The company reports gains on the forward, and then closes the forward and buys the equipment. The company follows IFRS, and it uses the gain as a basis adjustment to the reported cost of the equipment. Which statement is true?
a. The IFRS company will report a lower equipment value on its balance sheet
 than if it followed U.S. GAAP.
b. The IFRS company will report less total depreciation expense on the equipment than if it followed U.S. GAAP.
c. The IFRS company will report a higher equipment value on its balance sheet
 than if it followed U.S. GAAP.
d. The IFRS company will report more total depreciation expense on the equipment than if it followed U.S. GAAP.

Answer rating: 100% (QA)

ANSWER The IFRS mny will rert lwer equiment vlue n its blne sheet t... View the full answer