Recording sales transactions qualifying as foreign-currency firm commitments Assume our U.S.-based company's functional currency is the $US and it enters into a "firm commitment" with a Portugal-based retailer on November 15, 2018. The firm commitment requires our company to sell 20,000 units of an inventory item costing 25 each to the Portuguese company. Our company is contractually committed to ship the inventory (i.e., title transfers) on February 15, 2019, with payment in Euros on the same date. Our company does recurring business with the Portuguese company, and the firm commitment includes significant monetary penalties for nonperformance. Also assume, on November 15, 2018, our company enters into a contract with a foreign currency exchange broker to sell Euros (for settlement on February 15, 2019) to mitigate the risk of exchange rate fluctuation. This derivative qualifies as a fair value hedge. The relevant exchange rates and related balances for the period from November 15, 2018, to February 15, 2019, are as follows: Derivative-Forward Spot Rate Forward Rate Date (SUS = 1) ($US = (1) FVb Change in FV November 15, 2018 1.43 December 31, 2018 1.38 1.38 1.36 $10,000 $10,000 February 15, 2019 1.28 1.28 50,000 40,000 For settlement on February 15, 2019 b Ignore discounting in the computation of fair values. On December 31, 2018, what amount should be reported for the hedged firm commitment? Select one: a. $0 b. $10,000 asset * c. $10,000 liability d. $680,000 asset