A U.S. company reports a forward contract as a cash flow hedge of a forecasted sale of merchandise to a U.K. customer, payment to be received in pounds. When are gains and losses on the forward contract reported in income?
A) When the customer pays for the merchandise
B) When the anticipated sale becomes a firm commitment
C) As the market value of the hedge investment changes
D) When the U.S. company reports sales revenue on the sale
Correct Answer:
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