On January 5 , 2 0 2 2 , our company receives a nonbinding purchase order for
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Question:
On January our company receives a nonbinding purchase order for sale of merchandise to a customer in Slovakia, with delivery of the merchandise scheduled for June The customer preliminarily agreed to pay for the merchandise, and payment is due from the customer upon delivery. On January our company also purchases an option that gives our company the right to sell ie put on any date until June ie it is an Americanstyle option for $:ie the spot rate on January On January the fair value of the option ie the option premium is $ In addition, our company elected to immediately include in the determination of net income all of the change in option value attributable to factors excluded from the assessment of hedge effectiveness ie the nonintrinsicvalue components, like time value The relevant exchange rates and related balances for the period from January to June are as follows:
Posted Date: