A US Parent Hedges Its Exposure to Exchange Rate Changes Caused

Multiple Choice

A U.S. parent hedges its exposure to exchange rate changes caused by its investment in its subsidiary in Singapore. The subsidiary's functional currency is the U.S. dollar. Where are gains and losses on the hedge reported in the consolidated financial statements?

A) In other comprehensive income.
B) They are not reported.
C) In income.
D) As an adjustment to Investment in subsidiary.