Many companies issue fixed-rate foreign currency denominated debt in which the principal and interest pay¬ ments are made in a foreign currency. There is some question as to whether a foreign currency denominated interest payment should be considered

(a) an unrecognized firm commitment that could be designated as a hedged item in a foreign currency fair value hedge or

(b) a forecasted transaction that could be designated as the hedged item in a foreign currency cash flow hedge. The FASB’s Derivatives Implementation Group (DIG) has addressed many implementation issues including this question. Search the Derivative Instruments and Hedging Activities database in the FASB’s Financial Accounting Research System (FARS). LO9 

Required 1. Identify the number of the Statement 133 Implementation Issue that provides an answer to this issue.

2. Summarize the DIG’s response with respect to the issue.