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:

Herzberg's Two-Factor Theory

A motivational theory that identifies two sets of factors that impact employee satisfaction and motivation: hygiene factors and motivators.

Attractiveness

The quality of being appealing or desirable, often considered in contexts such as product design, marketability, or physical appearance.

Valence

In psychology and motivational theory, the attractiveness or desirability of a reward or outcome.

Outcome Satisfies

The result of an action or process meets the expectations or requirements set forth.