Question 13The gain or loss on the effective portion of a U.S. parent company's hedge of a net investment in a foreign entity should be treated as: an adjustment to the retained earnings account in the stockholders' equity section of its balance sheet. other comprehensive income. a translation gain or loss in the computation of net income for the reporting period. an adjustment to a valuation account in the asset section of its balance sheet.

Introduction:- The gain or loss on the effective portion of a U.S. parent company's hedge of a net investment in a foreign entity As per the above question company getting income through hedging. Explanations:- Hedge of a net investment in a foreign entity is unrealized gain or loss which is not comes under regular activities, it is not a actual profit or loss it will be shown as other comprehensive income The gain or loss on the effective portion of a U.S. parent company's hedge of a net investment in a foreign entity should be treated as other comprehensive income.Conclusion:- As per the above discussions option "b" is the correct answer, which satisfies the given requirement and remaining options do not satisfies the given requirement... I hope helpful to you.. If you are satisfied.. Support me.. Thank you..

Answered: Question 13 The gain or loss on the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 13

The gain or loss on the effective portion of a U.S. parent company's hedge of a net investment in a foreign entity should be treated as:

		an adjustment to the retained earnings account in the stockholders' equity section of its balance sheet.
		other comprehensive income.
		a translation gain or loss in the computation of net income for the reporting period.
		an adjustment to a valuation account in the asset section of its balance sheet.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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