Which of the following statements is true about hedge accounting under U.S. GAAP?
A. Companies may choose whether to account for derivatives as cash flow hedges or fair value hedges.
B. If a derivative qualifies as a cash flow hedge, a company may choose to account for it as a fair value hedge.
C. If a derivative is considered a cash flow hedge, it must be accounted for as such.
D. Hedge accounting is only advantageous when a foreign currency depreciates between the transaction date and the payment date.
Answer:B
Which of the following statements is true about hedge accounting under U.S. GAAP?
A. Companies may choose whether to account for derivatives as cash flow hedges or fair value hedges. B. If a derivative qualifies as a cash flow hedge, a company may choose to account for it as a fair value hedge. C. If a derivative is considered a cash flow hedge, it must be accounted for as such. D. Hedge accounting is only advantageous when a foreign currency depreciates between the transaction date and the payment date.