Does rolls-royce canada limited have to adopt hedge

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Rolls-Royce Canada Limited, located in Montreal, services aero-engine repairs and maintenance for major North American airlines. Its primary revenue stream is in US dollars as 90% of its customers are US based airlines. The parent company, Rolls-Royce plc., in the UK, has a policy of billing all subsidiaries worldwide requiring aero engine parts in US dollars and this purchase activity comprises 98% of the company's parts and materials procurement.

problem 1: Based on the information provided, does Rolls-Royce Canada Limited have to adopt Hedge Accounting? Explain fully why or why not.

Reference no: EM132809427

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