For speculative derivatives, the change in the fair value of the derivative must be:
A) Utilized to adjust the derivative asset.
B) Recognized immediately as a gain or loss in net income.
C) Recognized as a loss in other comprehensive income.
D) Recognized as a gain in other comprehensive income.
E) Recognized as a gain or loss in net income at a later date.

Question

Quizplus · Accepted Answer

For speculative derivatives, changes in fair value are recognized immediately in net income as gains or losses, reflecting the speculative nature of the investment.

For Speculative Derivatives, the Change in the Fair Value of the Derivative