Amount of gain from the derivative investments


Question: Big Brown Corporation's derivative investments had the following fair values at December 31, 20X6 and December 31, 20X7:

                                                          12/31/X6 12/31/X7
Speculative derivatives                        $280,000 $310,000
Derivatives used as fair value hedges    $600,000 $745,000
Derivatives used as cash flow hedges    $430,000 $510,000

The derivatives used as fair value hedges and cash flow hedges were both considered highly effective in 20X7.

What amount of gain from these derivative investments should Big Brown report in its 20X7 net income and other comprehensive income?

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Amount of gain from the derivative investments
Reference No:- TGS01930146

Now Priced at $25 (50% Discount)

Recommended (94%)

Rated (4.6/5)