Foreign currency transaction gains attributable to a forward contract designated as a hedge of a foreign-currency denominated firm commitment are recognized in the carrying amount of the hedged item.

Question

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When a forward contract is designated as a hedge of a foreign-currency denominated firm commitment, any gains or losses on the forward contract are recognized in the carrying amount of the hedged item to offset the foreign currency transaction gains or losses.

Foreign Currency Transaction Gains Attributable to a Forward Contract Designated