medium · Financial Accounting stockholders-equity
A company has a 'Cash Flow Hedge' on a forecasted purchase. The derivative gains $10,000 in value due to market shifts.
Where is this gain initially recorded assuming the hedge is perfectly effective?
- As a reduction to the cost of the asset being hedged
- Directly to Retained Earnings
- Net Income as a 'Gain on Derivative'
- Other Comprehensive Income (OCI)
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