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Forward contract

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Querist : Anonymous

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Querist : Anonymous (Querist)
04 May 2012 Sir,

A company has entered into the hedging agreement for dollar rate.

they utilized the contract for payment, which was in EURO.

how would they account for this transaction.
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Guest (Expert)
04 May 2012 I wonder how Dollar contract can be used to make payment in Euro. If it is so then what is the use of entering into hedging agreement for dollar.

Wrt transaction, here you have to account only for the premium, if any, paid for the hedging transaction

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