On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements? Half as part of net income and the other half as comprehensive income you shouldn't recognize it within net income as other comprehensive income
On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements? Half as part of net income and the other half as comprehensive income you shouldn't recognize it within net income as other comprehensive income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On October 2020, X Corporation purchased a financial instrument that qualifies as a derivative and serves as a hedge for market value risk. At the end of the year the instrument increased in value by 4,000 . How should corporation X present that profit in the financial statements?
Half as part of net income and the other half as comprehensive income
you shouldn't recognize it
within net income
as other comprehensive income
Expert Solution
Step 1
Other comprehensive income is the statement which is prepared to record the gain or losses, revenue and expenses which are not yet realised and cannot be taken into income statement.
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