CFA论坛 - Powered by Discuz! Board

标题: Reading 24: The Lessons We Learn-LOS c 习题精选 [打印本页]

作者: 土豆妮 时间: 2010-4-14 16:29 标题: [2010]Session 7-Reading 24: The Lessons We Learn-LOS c 习题精选

Session 7: Financial Reporting and Analysis: Earnings Quality Issues
and Financial Ratio Analysis
Reading 24: The Lessons We Learn

LOS c: Provide a simplified description of the accounting treatment for derivatives being used to hedge 1) exposure to changes in the value of assets and liabilities, 2) exposure to variable cash flow, and 3) a foreign currency exposure of an instrument in a foreign corporation.

What value is used in the balance sheet when reporting a derivative instrument used in a cash flow hedge and where are the unrealized gains and losses on the derivative instrument reported?

Balance sheet

Unrealized gains and losses

A)

Fair value

Other comprehensive income

B)

Cost

Other comprehensive income

C)

Fair value

Income statement

A derivative instrument used in a cash flow hedge is reported on the balance sheet at fair value and the unrealized gains and losses are recognized in the other comprehensive income.

作者: 土豆妮 时间: 2010-4-14 16:29

Recently, Firebird Corporation purchased 1,000 shares of GTO Corporation for $50 per share. GTO is a non-dividend paying stock and Firebird expects to sell the investment in the near term. To hedge the investment, Firebird purchases a put option and designates the option as a fair value hedge. Ignoring the premium paid for the option, what is the net effect on Firebird’s total assets and net income if GTO declines $5 per share at year-end?

Total assets

Net income

A)

Decrease

No net effect

B)

No net effect

Decrease

C)

No net effect

No net effect

Total assets do not change. The decrease in the value of the investment is exactly offset by the increase in value of the option. Net income is also unaffected. The unrealized loss on the investment is offset by the unrealized gain on the option.

作者: 土豆妮 时间: 2010-4-14 16:29

MSH Corporation uses gold to manufacture jewelry. MSH anticipates the need for gold on June 30^th for goods that will be sold on September 30^th. Concerned that the price of gold will increase, MSH purchases a futures contract and designates the contract as a cash flow hedge. As it turns out, the spot price of gold was lower at the end of June when the contract was settled. When should MSH recognize the loss on the futures contract in the income statement and should the loss be included in income from continuing operations (IFCO)?

Date loss is recognized

Loss included in IFCO

A)

September 30^th

No

B)

September 30^th

Yes

C)

June 30^th

Yes

On June 30^th, the loss on the futures contract should be reported in other comprehensive income. When the goods are sold on September 30^th, the loss should be recognized in the income statement along with the cost of goods sold which is lower since the price of gold declined. The loss is neither extraordinary nor related to a discontinued operation. Thus, the loss is reported “above the line” as a part of income from continued operations.

作者: luqian55 时间: 2010-6-1 09:57

THANKS

作者: rosemarie 时间: 2011-1-31 05:05

[em52]

欢迎光临 CFA论坛 (http://forum.theanalystspace.com/)