Derivative Instruments and Hedging Activities Paper 3

1

The process of bifurcation






2

Alvarez Corporation has two hybrid financial instruments. According to ASC Topic 815, how can Alvarez account for these instruments?






3

According to ASC Topic 815, when a company elects not to bifurcate a hybrid financial instrument, the entire hybrid instrument should be valued at






4

When an election is made not to bifurcate a hybrid financial instrument, how should this be disclosed on the financial statements?
I. As separate line items for the fair value and non–fair value instruments on the balance sheet.
II. As an aggregate amount of all hybrid instruments with the amount of the hybrid instruments at fair value shown in parentheses.
III. As a footnote disclosure.






5

If a company elects not to bifurcate a hybrid financial instrument and records the entire instrument at fair value, which of the following is true?






6

Hedge accounting is permitted for all of the following types of hedges except






7

Which of the following is a general criterion for a hedging instrument?






8

For an unrecognized firm commitment to qualify as a hedged item it must






9

A hedge of the exposure to changes in the fair value of a recognized asset or liability, or an unrecognized firm commitment, is classified as a






10

Gains and losses on the hedged asset/liability and the hedged instrument for a fair value hedge will be recognized






Result

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