A company purchases a machine in USD with long delivery timelines. The exchange rate fluctuates before the machine arrives. What must be done?

Question

Answer

The asset must be revalued immediately because foreign purchases alter fair value

Answer

The liability remains fixed until delivery because inventory is not yet recognised

Answer

The cash flow hedge must be designated regardless of organisational policy

Answer

The liability is retranslated at each reporting date even if asset delivery has not occurred

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