Questions from Advanced Accounting

Q: What criteria are required for a hedged item to qualify for special

What criteria are required for a hedged item to qualify for special accounting as a fair-value hedge?

Q: Interest rate swaps were used in the chapter to highlight the differences

Interest rate swaps were used in the chapter to highlight the differences between fair-value and cash-flow hedge accounting. Explain what type of risk is being hedged when a receive-fixed, pay-variabl...

Q: Explain the circumstances under which fair-value hedge accounting should be

Explain the circumstances under which fair-value hedge accounting should be used and when cash-flow hedge accounting should be used.

Q: ASC 815 allows companies to account for certain hedges of existing foreign

ASC 815 allows companies to account for certain hedges of existing foreign currency–denominated receivables and payables as cash-flow hedges. Also in ASC 815, hedges of existing assets and liabilities...

Q: Briefly describe how derivatives are accounted for according to the International Accounting

Briefly describe how derivatives are accounted for according to the International Accounting Standards Board. Is the accounting similar to U.S. GAAP? How is it different?

Q: Briefly describe how derivatives are accounted for according to the International Accounting

Briefly describe how derivatives are accounted for according to the International Accounting Standards Board. Is the accounting similar to U.S. GAAP? How is it different?

Q: Explain the objective of hedge accounting and how this objective should improve

Explain the objective of hedge accounting and how this objective should improve the transparency of financial statements.

Q: Explain the differences between options, forward contracts, and futures contracts

Explain the differences between options, forward contracts, and futures contracts and the potential benefits and potential costs of each type of contract.

Q: Hedge effectiveness must be documented before a particular hedge qualifies for hedge

Hedge effectiveness must be documented before a particular hedge qualifies for hedge accounting. Describe the most common approaches used to determine hedge effectiveness and when they are appropriate...

Q: Pop Corporation purchased an 80 percent interest in Son Corporation for $

Pop Corporation purchased an 80 percent interest in Son Corporation for $170,000 on January 1, 2016, when Son’s stockholders’ equity was $200,000. The excess of fai...