Foreign Currency Hedge

A foreign currency hedge is a financial instrument designated as hedging exposure to variability in foreign currency in a variety of foreign currency transactions. Gains and losses on changes in fair value of foreign currency transaction hedges entered into as fair value hedges are accounted for in the same manner as gains/losses on other fair value hedges�in earnings. Gains and losses on changes in fair value of foreign currency transactions entered into as cash flow hedges are accounted for in the same manner as gains/losses on cash flow hedges�in other comprehensive income. See also fair value hedge and cash flow hedge.