Which of the Following Is True Concerning the Accounting for a Foreign

question 45

Multiple Choice

Which of the following is true concerning the accounting for a foreign currency option?

• A) Hedge accounting is allowed when the characteristics and terms of the transaction cannot be identified.
• B) Hedge accounting is not allowed when the anticipated transaction will most likely occur.
• C) The option is carried as fair value on the balance sheet.
• D) Options gains are deferred, whereas options losses are recognized in the period in which they occur.