Jordan Corp is a US manu8facturer of auto pats with branchoperatiopns in France. on December 31, 2018 wishesto use a foreign currency option to hedge a 10,000,000 euro denominated accounts receivable that is due in two years. Jordan plans to use fair value hedge accounting. Over the subsequent 4 quarters the following are the changes in fair value of the receivable and the forreign currency option hedge. 1) Quarter ended March 31, 2019: Euro receivable increases by $400,000 Option hedge declines by $350,000 2) Quater ended June 30, 2019: Euro receivable decreases by $500,000 Option hedge increases by $400,000 3) Quarter ended Sept 30, 2019: Euro receivable decreases by $800,000 Option hedge increases by $700,000 4) Quarter ended Dec. 31, 2019: Euro receivable increases by $200,000 Option hedge declines by $100,000 Identify by codification reference, e.g. xxx-xx-xx-xx, and attach and highlight the appropriate section(s) of FASB codification that describe the alternate criteria that can be used to determine at 31, 2019 whether or not this has been an effective fair value hedge.
Jordan Corp is a US manu8facturer of auto pats with branchoperatiopns in France. on December 31, 2018 wishesto use a foreign currency option to hedge a 10,000,000 euro denominated
1) Quarter ended March 31, 2019:
Euro receivable increases by $400,000
Option hedge declines by $350,000
2) Quater ended June 30, 2019:
Euro receivable decreases by $500,000
Option hedge increases by $400,000
3) Quarter ended Sept 30, 2019:
Euro receivable decreases by $800,000
Option hedge increases by $700,000
4) Quarter ended Dec. 31, 2019:
Euro receivable increases by $200,000
Option hedge declines by $100,000
Identify by codification reference, e.g. xxx-xx-xx-xx, and attach and highlight the appropriate section(s) of FASB codification that describe the alternate criteria that can be used to determine at 31, 2019 whether or not this has been an effective fair value hedge.
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