Ineffective portions of hedges should go to NI or OCI?

practice, effective, recognized, net

In CFAI Volume 2, practice problem #6.B (Page 349):
The ineffective portions of hedge were recongized in net income.

The provided corect answer is C other than B, which means that the above statement is wrong.

However, in Schweser Book 2, the last sentence said (Page 167):
Any portion of the hedge that is not effective is recognized in the income statement.

1. Where should the ineffective portions of hedges be recognized?
A. Net Income in income statement; or
B. Other Comprehensive Income in equity of balance sheet.

2. Where should the "effective" portions of hedges be recognized for Fair Value/Cash Flow hedge?
A. Net Income in income statement; or
B. Other Comprehensive Income in equity of balance sheet; or
C. No shown in any financial statement.

Thanks,
JW

Edited 1 time(s). Last edit at Thursday, May 19, 2011 at 04:33AM by jwmeng.