Which of the Following Statements Is NOT Correct

question 39

Multiple Choice

Which of the following statements is NOT correct?

• A) In a fair value hedge, the entity uses a hedging instrument to hedge against the fluctuation in the fair value of the hedged item. This method will be used when the hedged item will be valued at fair value.
• B) In a cash flow hedge, the entity uses a hedging instrument to hedge against the fluctuation in the Canadian dollar value of future cash flows.
• C) The gain or loss on the hedging instrument in a cash flow hedge is initially reported in other comprehensive income and reclassified to profit and loss when the hedged item affects profit.
• D) The gain or loss on the hedging instrument in a fair value hedge is initially recognized in other comprehensive income and transferred to profit and loss when the hedged item has been revalued for accounting purposes in accordance with IFRS.

---

Definitions:

Legal Requirement

A mandate imposed by law, which must be complied with by individuals, organizations, or institutions.

Special Needs

Refers to individuals, especially children, who require extra health care, education services, or specialized equipment or accommodations due to physical, mental, emotional, or learning disabilities.

Educational Context

The environment or setting in which teaching and learning occur, including factors like curriculum, pedagogy, and school culture.

Developmental Stage

A phase in an individual's life characterized by specific milestones in physical, emotional, cognitive, and social development.