When an Item Is Deemed to Hedge a Net Investment

question 42

Multiple Choice

When an item is deemed to hedge a net investment in a foreign subsidiary, any gain or loss on the hedging items is recorded in _________________.

• A)Other Comprehensive income.
• B)Income.
• C)Other comprehensive income or income.
• D)Equity.

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Definitions:

Irreconcilables

A group of U.S. senators who opposed the Treaty of Versailles and U.S. membership in the League of Nations after World War I, fearing it would limit national sovereignty.

Treaty of Versailles

The 1919 peace treaty that ended World War I, imposing punitive conditions on Germany and redrawing the map of Europe, significantly impacting future international relations.

British And German Naval Policies

The strategies and doctrines employed by Britain and Germany to expand and maintain their naval forces, often leading to increased tensions and competition, especially in the early 20th century.