Under Special Accounting Treatment for Cash Flow Hedge of a Forecasted

question 39

Multiple Choice

Under special accounting treatment for cash flow hedge of a forecasted transaction, the relationship between the change in value of a derivative instrument and the change in value of the forecasted transaction affects the amount of gain (loss) that should be in Other Comprehensive Income (OCI) .If the amount of gain on derivatives that is classified as OCI is $17,500 and the cumulative loss on the remaining forecasted transaction is ($13,200) , the amount of OCI to be reclassified as a component of current earnings is

• A)​$4,300.
• B)​$13,200.
• C)​$17,500.
• D)​not applicable.

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Definitions:

Sample Size

The number of observations or participants in a study, significant for determining the study's statistical power.

Internal Validity

The extent to which a study can demonstrate a clear cause-and-effect relationship, limiting the impact of external variables.

Dependent Variables

In an experiment, these are the variables that are tested and measured to see how they are affected by changes in independent variables.

Cognitive Analysis

The process of breaking down mental activities and thought processes into their components for understanding.