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In the accounting for forward exchange contracts, gains and losses are measured usind either spot or forward rates. Which of the following statements concerning measurement of gains and losses is true?

A. The gains or losses in a hedge on an exposed asset will use the spot rate for the asset and the forward rate for the forward contract.

B. The gains or losses in a speculative hedge will use the forward rate throughout the contract.

C. The gains or losses in a hedge on an identifiable commitment will use the spot rate for the commitment and the forward rate for the forward contract.

D. All of these statements are true.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9447754

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