When gains or losses on derivatives designated as fair value hedges exceed the gains or losses on the item being hedged,the excess
A) affects reported net income.
B) is recognized as an equity adjustment.
C) is recognized as part of comprehensive income.
D) is not recognized.

Question

Quizplus · Accepted Answer

According to the accounting standard ASC 815, gains or losses on fair value hedges that exceed the gains or losses on the item being hedged are recognized immediately in earnings, affecting reported net income.

When Gains or Losses on Derivatives Designated as Fair Value