A Company Has a Discount on a Forward Contract for a Foreign

question 49

Multiple Choice

A company has a discount on a forward contract for a foreign currency denominated asset. How is the discount recognized over the life of the contract under fair value hedge accounting?

• A) As a debit to discount expense.
• B) As a debit to amortization expense.
• C) As a debit to accumulated other comprehensive income.
• D) As a debit impact on net income, as a result of the hedge.
• E) As a decreases to sales.

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