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8 Cards in this Set
- Front
- Back
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GAAP .... a 2-transaction perspective
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requires |
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the 2-transaction perspective accounts for:
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-gains/losses from exchange rate fluctuations |
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2 foreign currency derivatives that are often used to hedge foreign currency transactions
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-Foreign currency options |
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Foreign currency forward contracts lock in the price for which the currency will?
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sell at contracts maturity |
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Foreign currency options establish a price for which the currency can be ......, but is not required to be .... ... ....
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-sold -sold at maturity |
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ASC Topic 815 provides guidance for hedges of four types of foreign exchange risk
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2. Unrecognized foreign currency firm commitments 3. Forecasted foreign currency denominated transactions 4. Net investments in foreign operations |
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The fair value of the derivative is recorded at the same time as the transaction to be hedged, based on:
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-forward rate when forward contract was entered into -current forward rate for contract that matures on same date as the forward contract. -A discount rate (company's incremental borrowing rate |
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Export sales and import purchases are ...... ......; they are components of what is called .......
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-international transactions -trade |
