Under IFRS, Which of the Following Statements About Hedging a Foreign

question 1

Multiple Choice

Under IFRS, which of the following statements about hedging a foreign currency risk of an accepted purchase order is true?

• A)It must be accounted for using a fair-value hedge.
• B)It must be accounted for using a cash-flow hedge.
• C)It can be accounted for using either a fair-value hedge or a cash-flow hedge.
• D)It is not eligible for hedge accounting until it becomes an accounts payable.

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Definitions:

Tube Worms

Marine invertebrates living in tube-like structures, part of the phylum Annelida or sometimes other groups.

Mean Annual Temperature

The average temperature of a specific location over the course of a year, taking into account all seasonal variations.

Precipitation Ranges

The variability in the amount of precipitation (rain, snow, hail, etc.) an area receives over a period of time.

Tropical Rainforest

A hot, moist biome found near Earth's equator, characterized by high biodiversity and dense vegetation.