The Discount or Premium on a Forward Contract Entered into as a Hedge

question 6

Multiple Choice

The discount or premium on a forward contract entered into as a hedge of an exposed asset or liability position should be:

• A) included as a separate component of stockholders' equity.
• B) amortized over the life of the forward contract.
• C) deferred and included in the measurement of related foreign currency transaction.
• D) none of these.

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Definitions:

Anterior

Located towards the front of the body in anatomical positions.

Distal

Referring to a position farther from the point of attachment or the trunk of the body.

Ventral

Pertaining to the front or anterior part of the body; opposite of dorsal.

Cephal/o

A prefix in medical terminology meaning "head."