Questions from Advanced Accounting

Q: Why would a company prefer a foreign currency option over a forward

Why would a company prefer a foreign currency option over a forward contract in hedging a foreign currency firm commitment? Why would a company prefer a forward contract over an option in hedging a fo...

Q: How do companies report foreign currency derivatives, such as forward contracts

How do companies report foreign currency derivatives, such as forward contracts and options, on the balance sheet?

Q: How does a company determine the fair value of a foreign currency

How does a company determine the fair value of a foreign currency forward contract? How does it determine the fair value of an option?

Q: What is hedge accounting?

What is hedge accounting?

Q: Under what conditions can companies use hedge accounting to account for a

Under what conditions can companies use hedge accounting to account for a foreign currency option used to hedge a forecasted foreign currency transaction?

Q: On January 1, 2018, Stamford reacquires 8,000 of

On January 1, 2018, Stamford reacquires 8,000 of the outstanding shares of its own common stock for $24 per share. None of these shares belonged to Neill. How does this transaction affect the parent c...

Q: What are the differences in accounting for a forward contract used as

What are the differences in accounting for a forward contract used as (a) A cash flow hedge and (b) A fair value hedge of a foreign currency denominated asset or liability?

Q: What are the differences in accounting for a forward contract used as

What are the differences in accounting for a forward contract used as a fair value hedge of (a) A foreign currency denominated asset or liability and (b) A foreign currency firm commitment?

Q: What are the differences in accounting for a forward contract used as

What are the differences in accounting for a forward contract used as a cash flow hedge of (a) A foreign currency denominated asset or liability and (b) A forecasted foreign currency transaction?

Q: How are changes in the fair value of an option accounted for

How are changes in the fair value of an option accounted for in a cash flow hedge? In a fair value hedge?