Gains and losses resulting from a derivative instrument used for a cash flow hedge are recognized in current earnings:

Question

Quizplus · Accepted Answer

Gains and losses from a derivative used in a cash flow hedge are recognized in current earnings for the portion that is deemed ineffective and in the same period the hedged item affects earnings. This ensures that the hedge's effectiveness in offsetting changes in cash flows of the hedged item is accurately reflected.

Gains and Losses Resulting from a Derivative Instrument Used for a Cash