On November 1, 2020, Jeramae entered into a firm commitment with Jeanette for the exportation of goods at a price of $2000. Delivery will happen on January 31, 2020. In order to hedge this foreign currency denominated firm commitment, Jeramae entered into a forward contract with a bank to sell $2000. Jeramae is operating in Philippine economy where the functional currency is Philippine peso. Jeramae elects to use fair value hedge to account this hedge of firm commitment. The following direct changes are given: November 1, 2020 December 31, 2020 Buying spot P43 40 Selling spot 45 44 90-day forward buying 41 43 90-day forward selling 42 41 60-day forward buying 45 42 60-day forward selling 46 45 30-day forward buying 47 46 30-day forward selling 48 44 What is the foreign currency gain on hedging instrument for the year ended December 31, 2021?
On November 1, 2020, Jeramae entered into a firm commitment with Jeanette for the exportation of goods at a price of
$2000. Delivery will happen on January 31, 2020. In order to hedge this foreign currency denominated firm commitment,
Jeramae entered into a forward contract with a bank to sell $2000. Jeramae is operating in Philippine economy where the
functional currency is Philippine peso. Jeramae elects to use fair value hedge to account this hedge of firm commitment.
The following direct changes are given:
November 1, 2020 December 31, 2020
Buying spot P43 40
Selling spot 45 44
90-day forward buying 41 43
90-day forward selling 42 41
60-day forward buying 45 42
60-day forward selling 46 45
30-day forward buying 47 46
30-day forward selling 48 44
What is the foreign currency gain on hedging instrument for the year ended December 31, 2021?
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