The question is regarding using future to hedge material and engery price increase in the future. What’s you answer to this one? Can anyone explain to me how the futures hedging booked on financial stmt before and after the settlement? “What impact did the derivatives (futures contracts) have on Food-for-All’s 2010 financial statements? A. The gains or losses on the hedges were recognized in net income. B. The ineffective portions of the hedges were recognized in net income. C. The effective portions of the hedges were recognized in comprehensive income.” (Institute 294) Institute, CFA. Level II 2013 Volume 2 Financial Reporting and Analysis. John Wiley & Sons (P&T), 7/9/2012. .
Hi, this question has been discussed before:
http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91317190
Unfortunately, its not very well written. I actually don’t agree with the answer, and so do many previous posters on this forum 