[Lidis]

My understanding of an effective and ineffective portion of a hedge, when you purchase a product you hedging with one known factor (price) and one unknown factor (spot rate). You are hoping that both known and unknown factors will match in the future. If they do not match you would have an effective and ineffective portion. It will be a loss or gain, if is a loss goes to income statement and if it is a gain will goes to other comprehensive income.

Is this statement correct?