The Portable MBA in Finance and Accounting, 3rd Edition

368 Planning and Forecasting case of asset exposure. With the option contract, a call option is acquired in the case of liabilit ...

Global Finance 369 also have the high level of liquidity that is characteristic of other exchange- traded derivatives. They also ...

370 Planning and Forecasting principally through its regular operating and financing activities.”^20 These approaches to reducin ...

Global Finance 371 value of the Company’s investment in foreign subsidiaries resulting from a 10% adverse change in foreign-curr ...

372 Planning and Forecasting also a factor. As with insurance generally, closing out fully the possibility of loss is more expen ...

Global Finance 373 EXHIBIT 12.12 Disclosure of net investment hedge: The Quaker Oats Company, December 31, 1999 (in millions). C ...

374 Planning and Forecasting Hedging Costs There is little discussion in company reports about the cost of hedging. In some case ...

Global Finance 375 for hedging purposes. Holding a derivative contract for other than hedging purposes is normally termed a spec ...

376 Planning and Forecasting same exchange rate. Translation would simply amount to a scaling of the state- ments of the foreign ...

Global Finance 377 exchange rates and (2) the inclusion of translation adjustments in shareholders’ equity marks it as using the ...

378 Planning and Forecasting historical exchange rates. These procedures are followed when translation (re- measurement) follows ...

Global Finance 379 grouped first, and those with credit balances, liabilities, equities, and rev- enues, are grouped second. The ...

380 Planning and Forecasting In the absence of dividends, the retained earnings in the balance sheet are simply the net income f ...

Global Finance 381 The ending inventory was acquired at the average exchange rate of $0.62, and cost of sales is also made up o ...

382 Planning and Forecasting The explanation for the remeasurement loss of $87 is that balance-sheet exposure changed from net a ...

Global Finance 383 remeasured at the ever-changing current rate. However, none of the other non- monetary balance-sheet accounts ...

384 Planning and Forecasting the temporal method. The working capital ratio differs because inventory is translated at a rate of ...

Global Finance 385 simply translating into fewer dollars as well as (2) declines in the volume of for- eign sales due to the wea ...

386 Planning and Forecasting Disclosed sales growth 0% Breakdown of Sales-Change Components Vo l u m e +5% Price changes +2% Cur ...

Global Finance 387 The reduced level of currency risk-management in the case of translation exposure is explained largely by the ...