RE:RE:RE:RE:RE:RE:RE:Sub $11 on its waygeemonet wrote
Excellent analogy.
I was surprised that the ... loss of profit would be recorded as a loss. Is recording this loss beneficial come tax time? That would be one heck of a party trick
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I am not really sure how they treat it at tax time. I would assume that if they declared hedging losses as a loss in their financial statements they would also have to declare the unhedged selling price they would have gotten for their oil and gas instead of the lower hedged price that they actually recieved.
Which would mean that the amount that they lost on hedges being used as a loss would be equal to the extra amount that they would have gotten if they were unhedged meaning that the loss and gain cancel each other out and the only income they would have to declare would be the amount they actually recieved at the hedged price.