Foreign Currency Hedging
In Du Pont Corporation’s 1994 annual report, Note 27 contained the following (partial) information:
Principal foreign currency exposures and related hedge positions on December 31, 1994, were as follows:
|
Open Contracts |
|||
|
Net Monetary |
to Buy(Sell) |
||
|
Currency |
Asset (Liability) |
Foreign Currency |
Net After-Tax |
|
(Dollars in millions) |
Exposure |
After Tax |
Exposure |
|
British pound |
$(1,428) |
$1,427 |
$(1) |
|
Dutch gilder |
$ 273 |
$ (271) |
$ 2 |
|
Italian lira |
$ 205 |
$ (206) |
$(1) |
Required
Discuss the impact that hedging has had on Du Pont’s financial statements.