Problem

Statement No. 138 allows companies to account for certain hedges of existing foreign curre...

Statement No. 138 allows companies to account for certain hedges of existing foreign currency–denominated receivables and payables as cash-flow hedges. Under Statement No. 133, hedges of existing assets and liabilities must be accounted for as fair-value hedges. Explain the circumstances that must be present for a hedge of an existing foreign currency–denominated receivable or payable to be accounted for as a cash-flow hedge and how the accounting differs from cash-flow hedge accounting in more-general situations.

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Solutions For Problems in Chapter 13