When an item is deemed to hedge a net investment in a foreign subsidiary, any gain or loss on the hedging items is recorded in _________________.

Question

Quizplus · Accepted Answer

When an item is deemed to hedge a net investment in a foreign subsidiary, any gain or loss on the hedging items is recorded in Other Comprehensive Income. This is because the objective of the hedge is to reduce the volatility of the foreign currency translation adjustments in Other Comprehensive Income, rather than to generate income or expenses in the current period.

When an Item Is Deemed to Hedge a Net Investment