In a hedge of a forecasted transaction, gains or losses on derivative instruments prior to the occurrence of the actual transaction should be reported as

Question

Quizplus · Accepted Answer

Gains or losses on derivative instruments used to hedge a forecasted transaction should be reported as a component of other comprehensive income until the actual transaction takes place. At that point, the amount is reclassified from other comprehensive income to income from continuing operations.

In a Hedge of a Forecasted Transaction, Gains or Losses