Perkle Coowned a Subsidiary in Belgium;the Subsidiary's Functional Currency Was the the Belgian

question 27

Essay

Perkle Co.owned a subsidiary in Belgium;the subsidiary's functional currency was the Belgian franc.During 2009,Perkle engaged in hedging transactions to offset part of the subsidiary's net asset position.How should the effects of exchange rate fluctuations on the currency hedge be accounted for?

---

Definitions:

Not Excludable

A characteristic of certain goods where it is not feasible to prevent individuals from consuming the good, such as public parks.

Not Rival

Refers to a good's characteristic where one person's consumption does not reduce the availability of the good for consumption by others.

Common Resources

Natural or man-made resources that are not owned by anyone, are available for use by more than one person, and can be depleted.

Public Good

A product that one individual can consume without reducing its availability to another individual and from which no one is excluded.