Derivatives/Hedging

1. The ff. data apply to MM’s purchase of 45,400 Euro under a forward contract dated Nov. 2, 2024, for delivery on Jan.
31, 2025.

11/2/2024 12/31/2024 1/31/2025

Spot rates ₱55.75 ₱53.90 ₱54.50
30-day forward rate 51.30 56.15 53.20
60-dayforward rate 57.65 52.30 55.75
90-day forward rate 54.25 55.45 52.10

MM entered into a forward contract to speculate in the foreign currency.

1. In its Income Statement for the year ended 2024, what amount of gain or loss should MM report from this contract?
2. In its Income Statement for the year ended 2025, what amount of gain or loss should MM report from this contract?

2. MM Co. sold merchandise for 111,200 euros to a customer in Europe on Nov. 2, 2024. Collection in euros was due on
Jan. 31, 2025. On the same date, to hedge this foreign currency exposure, MM Co. entered into a futures contract t sell
111,200 euros to Metrobank for delivery on Jan. 31, 2020. Exchange rate for euros on different dates are as follows:

Nov. 2 Dec. 31 Jan. 31

Spot rate 81.90 80.70 80.10

30-day futures rate 82.30 80.40 83.90

60-day futures rate 81.80 80.30 82.60

90-day futures rate 80.60 81.60 83.40

120-day futures rate 80.10 81.40 82.80

What amount will affect profit or loss regarding the hedged item on the FS date in 2024?

What amount will affect profit or loss regarding the hedged instrument on settlement date in 2025?

As a result of a foregoing transactions, what amount will affect the current earnings on settlement date in 2025?