QUESTION: 113

A company enters into a cash flow hedge to offset fluctuations in the value of foreign currency transactions occurring in two years. How should the company record the gains and/or losses on the cash flow hedge in the current year?

The hedged gains and losses are reported in comprehensive income.
The hedged gains and losses are reported in current period income.
The hedged gains and losses are reported in current period income together with the offsetting gains and losses of the foreign currency.
The hedged gains and losses are reported in comprehensive income together with the offsetting gains and losses of the foreign currency.

Answer(s): A

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QUESTION: 114

The auditors of a private college are examining and auditing the college’s financial statements. The statements are not presented in accordance with GAAP. What should the auditors do?