A Company Recognizes a Gain or Loss from a Fair

question 38

Multiple Choice

A company recognizes a gain or loss from a fair value hedge:

• A)On a deferred basis, with the gain or loss being reported in other comprehensive income in the interim.
• B)Within 18 months of the gain or loss from the item being hedged.
• C)Immediately in earnings along with the loss or gain from the item being hedged.
• D)No gains or losses are reported on fair value hedges.

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Definitions:

Current Liabilities

Current liabilities are financial obligations a company owes and is expected to pay within one year or within its operating cycle, whichever is longer.

Private Placement

The sale of securities to a relatively small number of selected investors as a way of raising capital, not publicly offered in the open market.