Advanced Accounting (Canada) · Foreign Currency Transactions & Hedging

A company holds a forward exchange contract that is NOT designated as a hedge (pure speculation). The forward's fair value swings between reporting dates. Where do those gains and losses go, and what makes this different from a cash flow hedge?

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More in Foreign Currency Transactions & Hedging

In a cash flow hedge, the effective portion of the hedging instrument's gain or loss sits in OCI. What single event triggers its reclassification into net income, and why is the timing the whole point?

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