Our U.S.-based company enters into a “firm commitment” with Ireland-based retailer on December 5, 2018. The firm commitment requires our company to sell 30,000 units of an inventory item costing €11.00 each to the Irish company. Our company is contractually committed to ship the inventory (i.e., title transfers) on March 5, 2019, with payment in Euros on the same date. Our company does recurring business with the Irish company, and the firm commitment includes significant monetary penalties for nonperformance. Also assume, on December 5, 2018, our company enters into a contract with a foreign currency exchange broker to sell Euros (for settlement on March 5, 2019) to mitigate the risk of exchange rate fluctuation. Our company’s functional currency is the U.S. dollar and our forward exchange contract qualifies as a fair value hedge. The relevant exchange rates and related balances for the period from December 5, 2018, to March 5, 2019, are as follows: