Asked Jan 10, 2020

Where are gains and losses related to cash flow hedges
involving anticipated transactions reported?


Expert Answer

Step 1

Derivatives: Derivative is a product whose value is derived from underlying assets called base. Basically, it is a contract between the two or more parties based on assets.


Cash flow hedge: Cash flow hedge is the process of reducing or eliminating the risk of changes in cash flow of financial assets or a liability due to the changes in specific risk, which arises due to interest rate risk on a floating rate debt instrument.


Fair value: Fair value is a selling price which is agreed by the buyer and seller.


Other comprehensive income or losses: All the ...

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