For a Cash Flow Hedge Relating to the Purchase of a Particular

Multiple Choice

For a cash flow hedge relating to the purchase of a particular asset,foreign exchange gains and losses made on the hedging instrument:

A) are all passed to profit or loss.
B) are passed to equity accounts up to the time of the underlying transaction, at which time they are then included as part of the cost of the asset. After this date, they are passed directly to profit or loss.
C) are all passed to the cost of the asset.
D) are passed to equity accounts up to the time of the expiration of the hedging instrument, at which time they are then included as part of the cost of the asset.
E) are passed directly to profit or loss up to the time of the underlying transaction. After this date, they are passed to equity accounts, up to the time of the expiration of the hedging instrument, at which time they are then included as part of the cost of the asset.