Question: Neron Co . has two derivatives related to two different financial instruments, Instrument A and Instrument B , both of which are debt instruments. The

Neron Co

.

has two derivatives related to two different financial instruments, Instrument A and Instrument B

,

both of which are debt instruments. The derivative related to Instrument

A

is a fair value hedge, and the derivative related to Instrument B is a cash flow hedge. Neron experienced gains in the value of Instruments A and B due to a change in interest rates. Which of the gains should be reported by Neron in its income statement?

Gain in value of both debt Instruments A and B

Neither gain in value of debt Instrument A or B

Gain in value of debt Instrument B only

Gain in value of debt Instrument A only

Neron Co . has two derivatives related to two

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