Analyzing Derivative Instruments Colgate-Palmolive Company reported the following information regarding its derivative instruments in its 2020...

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Analyzing Derivative Instruments Colgate-Palmolive Company reported the following information regarding its derivative instruments in its 2020 10-K report Excerpts from Note 7. Fan Value Measurements and Financial instruments The Company is exposed to market risk from foreign currency exchange rates, interest rates, and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions issued with standard features, in accordance with the Company's treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company's policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged. Provided below are details of the Company's exposures by type of risk and derivative instruments by type of hedge designation.... The following table presents the location and amount of gains posses) on hedges recognized on the Company's Consolidated Statements of Income: Twelve Months Ended December 31,3020 Selling General and Interest Sales Expenses Cost of Administrative (income) Expense Net Gain (less) en hedges recognized in income interest rate swaps designated as fair value hedges Derivative in 10 10 10 Hedge 0 0 10 Foreign currency contracts designated as fair value hedges Derivative instrument 29 0 29 B Foreign currency contracts designated as cash flow hedges Amount reclassified from OC 10 December 31, 2020 Selling General, Interest and Cost of Administrative (Income) Sales Expenses Expense, Net Derivative instrument Gain (loss) on hedges recognized in income: Interest rate swaps designated as fair value hedges:" Hedged items 50 50 5-10 0 0 10 Foreign currency contracts designated as fair value hedges: Derivative instrument Hedged items DO 0 29 0 -29 22 0 0 Foreign currency contracts designated as cash flow hedges: 1 0 Amount reclassified from OCI Commodity contracts designated as cash flow hedges: Amount reclassified from OCI Total gain (loss) on hedges recognized in income Required 1 0 50 50 50 a. What types of risks would the contracts listed above be designed to hedge against? Hedging contracts Interest rate swaps To mitigate changes in earnings and cash flows due to: Foreign currency contract changes in foreign currency exchange rates Commodity contracts changes in material purchase prices Interest rate volatility b. What is the net gain or loss recognized on the company's 2020 income statement related to the risks described in part a? 50 Analyzing Derivative Instruments Colgate-Palmolive Company reported the following information regarding its derivative instruments in its 2020 10-K report Excerpts from Note 7. Fan Value Measurements and Financial instruments The Company is exposed to market risk from foreign currency exchange rates, interest rates, and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions issued with standard features, in accordance with the Company's treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company's policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged. Provided below are details of the Company's exposures by type of risk and derivative instruments by type of hedge designation.... The following table presents the location and amount of gains posses) on hedges recognized on the Company's Consolidated Statements of Income: Twelve Months Ended December 31,3020 Selling General and Interest Sales Expenses Cost of Administrative (income) Expense Net Gain (less) en hedges recognized in income interest rate swaps designated as fair value hedges Derivative in 10 10 10 Hedge 0 0 10 Foreign currency contracts designated as fair value hedges Derivative instrument 29 0 29 B Foreign currency contracts designated as cash flow hedges Amount reclassified from OC 10 December 31, 2020 Selling General, Interest and Cost of Administrative (Income) Sales Expenses Expense, Net Derivative instrument Gain (loss) on hedges recognized in income: Interest rate swaps designated as fair value hedges:" Hedged items 50 50 5-10 0 0 10 Foreign currency contracts designated as fair value hedges: Derivative instrument Hedged items DO 0 29 0 -29 22 0 0 Foreign currency contracts designated as cash flow hedges: 1 0 Amount reclassified from OCI Commodity contracts designated as cash flow hedges: Amount reclassified from OCI Total gain (loss) on hedges recognized in income Required 1 0 50 50 50 a. What types of risks would the contracts listed above be designed to hedge against? Hedging contracts Interest rate swaps To mitigate changes in earnings and cash flows due to: Foreign currency contract changes in foreign currency exchange rates Commodity contracts changes in material purchase prices Interest rate volatility b. What is the net gain or loss recognized on the company's 2020 income statement related to the risks described in part a? 50