Which of the following statements is not correct with respect to GASB Statement No. 53 which establishes reporting requirements for governments entering into derivative instruments?
A) Derivatives include swaps, options, forward contracts and future contracts.
B) If a derivative is effective in reducing a government's exposure to identifiable risks, the changes in the value of the derivative are reflected as investment gains or losses in the period that the value changes.
C) If a hedge derivative is deemed ineffective it is classified as investment purpose.
D) Statement No. 53 applies only to reporting at the government-wide level for derivatives held by governmental funds, not the fund-basis statements.
Answer: B) If a derivative is effective in reducing a government's exposure to identifiable risks, the changes in the value of the derivative are reflected as investment gains or losses in the period that the value changes.
You might also like to view...
If a company’s net profit margin is –5%, its total asset turnover is 1.5 times, and its financial leverage ratio is 1.2 times, its return on equity is closest to:
A. –9.0%. B. –7.5%. C. –3.2%.
________ represent the right to receive cash in the future from customers for goods sold or for services performed
A) Accounts Receivable B) Accounts Payable C) Equity D) Expenses