In an FX forward that hedges a foreign currency payable, the accrual of a discount would result in a credit being made to earnings.

Question

Quizplus · Accepted Answer

When a discount is accrued on an FX forward that hedges a foreign currency payable, it means that the forward contract is expected to result in a gain for the company. This gain is recognized in the income statement as a credit to earnings.

In an FX Forward That Hedges a Foreign Currency Payable