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4 Cards in this Set

  • Front
  • Back
Derivatives are recognized as what on the financial statements?
Assets or Liabilities
How are derivatives measured?
At Fair Value (FMV)
Changes in FMV of non-hedge derivatives are reported as
Gains/Losses in earnings (I/S)
Accounting for the unrealized gains/losses from the changes in FMV of hedge derivatives depends on the intended use of the derivative (3 of them)
(1) FV Hedge - reported in earnings
(2) Cash Flow hedge - effective portion reported in OCI; ineffective portion reported in earnings.
(3) Hedge of net invt in a foreign operation - reported the same as #2.