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What type of hedging transaction might be accounted

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Reference no: EM131007278

The following is an excerpt from a disclosure note of Johnson & Johnson:15. Financial Instruments (in part)As of December 28, 2008, the balance of deferred net gains on derivatives included in accumulated other comprehensive income was $121 million after-tax. The Company expects that substantially all of this amount will be reclassified into earnings over the next 12 months as a result of transactions that are expected to occur over that period.

Required:

1. Johnson & Johnson indicates that it expects that substantially all of the balance of deferred net gains on derivatives will be reclassified into earnings over the next 12 months as a result of transactions that are expected to occur over that period. What is meant by "reclassified into earnings"?

2. What type(s) of hedging transaction might be accounted for in this way? 

Reference no: EM131007278

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