Perkle Co. owned a subsidiary in Belgium; the subsidiary's functional currency was the Belgian franc. During 2021, Perkle engaged in hedging transactions to offset part of the subsidiary's net asset position. How should the effects of exchange rate fluctuations on the currency hedge be accounted for?

Question

Quizplus · Accepted Answer

The Answer of Perkle Co. owned a subsidiary in Belgium; the subsidiary's functional currency was the Belgian franc. During 2021, Perkle engaged in hedging transactions to offset part of the subsidiary's net asset position. How should the effects of exchange rate fluctuations on the currency hedge be accounted for?

Perkle Co Owned a Subsidiary in Belgium; the Subsidiary's Functional Currency