_____ On 12/12/06, a domestic exporter sold inventory to a Swiss company for 100,000 francs. On that date, the direct spot rate was $.20. At 12/31/06, the direct spot rate was $.24. On l/22/07, when the direct spot rate was $.21, the domestic exporter received full payment of 100,000 francs. In the importer's 2006 financial statements, what should be reported as an FX gain or loss?

Question

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The FX gain is calculated based on the difference between the spot rate at the time of sale and the spot rate at the time of payment. The sale was made at a rate of $.20, and payment was received when the rate was $.21, resulting in a gain. The gain is (0.21 - 0.20) * 100,000 = $1,000 * 100 = $4,000.

_____ on 12/12/06, a Domestic Exporter Sold Inventory to a Swiss