Practice
Check your answer
Write your response and explain your reasoning.
Reperform the Linden Peak forecast-purchase hedge. Show the derivative change, current OCI, inventory basis adjustment, and ending AOCI, then state which conclusions are supplied rather than proved by the schedule.
Compare your reasoning with the worked answer
The derivative gain and current OCI effect are $48,000. The qualifying forecast purchase moves $30,000 from AOCI into inventory basis, leaving $18,000 in ending AOCI. No current earnings amount is created by the basis adjustment at purchase.