Reference no: EM132448036

Answer the following the questions covering the main objectives of this module:

Question 1: Define and differentiate the differences between a cash flow hedge and a fair value hedge, including when (in or under which particular or specific circumstances) a U.S.-based firm would consider using one hedge versus the other hedge.

Question 2: Summarize the differences that exist between the US GAAP and IFRS on the accounting for derivatives designated as hedges at the current date you are answering this question.

Question 3: Prepare an example of a U.S.-based firm managing an exposed foreign currency net liability position, including the journal entries required from the date the U.S. firm purchases goods on account from a foreign-based supplier until the date the purchase is settled, including all journal entries required over a 3-month period.