Instructions

1. Read Advanced Accounting case 6 in the Cases linked in the Resources for this assignment: "Classification of a proposed financial instrument as a hedge."
2. Choose the appropriate database and research the relevant accounting standards to advise your client on how to classify a proposed financial instrument as a cash flow (or other) hedge. The resources listed in the first study of Unit 1 may be of use to you in completing this assignment.
3. Submit a brief report on case 6 in a Word document. Cite appropriate accounting standards to support your answers to the case scenario.

Submission Requirements

• Written communication: Written communication is free of errors that detract from the overall message.
• APA formatting: Resources and citations are formatted according to APA (current edition) style and formatting.
• Length: 34 double-spaced, typed pages, including cover and reference pages.
• Fontandfontsize:TimesNewRoman,12point.

Case 6: The Rich Company seeks to limit its potential exposure from future variable-interest debt by engaging in a cash flow hedge. Thus, it seeks to acquire a financial instrument that varies in price in opposition to Ricks expected payments on this debt instrument. However, it is unsure of the effectiveness of this hedging instrumentsince it is unsure of the expected timing of such transactions. Can Rich classify this proposed financial instrument as a cash flow (or other) hedge?