When the current rate method is used, FX gains and losses on hedges of net investments must be reported in Other Comprehensive Income.

Question

Quizplus · Accepted Answer

Under the current rate method, foreign exchange (FX) gains and losses on hedges of net investments in foreign operations are reported in Other Comprehensive Income (OCI) to offset the translation effects of the net investments being hedged, thus providing a more accurate reflection of the economic reality.

When the Current Rate Method Is Used, FX Gains and Losses