When completed submit your assignment to the appropriate area. Company A, an American company, owns Company B, a Canadian subsidiary. Company A borrowed 1,000,000 Canadian dollars as a hedge on its net investment in Company B. For 20X3, Company A recorded an exchange gain of $40,000 due to exchange rate changes. The 20X3 translation adjustment for Company B was a debit of $42,000.

Required:

Describe the accounting treatment required for the hedge on Company A's books.

Answer rating: 100% (QA)

Notably Canadian borrowing is effective and also designate... View the full answer