When are all forecasted transactions currently being hedged by Gold Star expected to occur?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
and anticipated transactions. In general, the types of risks hedged are those relating to the changes in interest rates. In hedging the transactions the Company, in the normal course of business, holds the following type of derivative:
| Type of Derivative | Type of Transaction Being Hedged |
|---|---|
| Interest Rate Swap | Cash Flows of Variab |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, all forecasted transactions currently being hedged are expected to occur in July 2028. The company uses derivative financial instruments to hedge risks related to changes in interest rates, ensuring that changes in the fair values or cash flows of hedged items and transactions are offset by corresponding changes in the values of the derivatives.
As of December 31, 2024, Gold Star had hedging relationships in place for these derivatives, and the income statement effect has been recorded in the consolidated financial statements. In 2024, 2023, and 2022, the company incurred additional interest from cash flow hedges, amounting to $262,505, $262,154, and $84,816, respectively.
Cash flow hedges of forecasted transactions resulted in an aggregate debit balance of $308,433 remaining in accumulated other comprehensive income as of December 31, 2024. This hedging strategy is designed to mitigate financial risks associated with interest rate fluctuations, providing a degree of stability and predictability in Gold Star's financial planning.