2.Fair value hedges (hedge accounting appIies).Hedges
of unrecognized firm commitments denominated In a foreign
currency (such as purchase orders issued to foreign vendors
and sales orders from foreign customers) fall into this
category.FX gains or losses on hedges of these firm
commitments are always reported currently in earnings.This
special hedge accounting treatment here, however, is that of
recognizing in earnings currently the gain or loss in the item
being bought or sold, even though the item has not yet been
received or shipped, respectively.