Question:
Foreign Currency translation and hedging activities.
Many companies make annual reports available on their corporate internet home page. Annual reports also will be accessed through the SEC's EDGAR system at www.sec.gov.
Access the most current annual report for a US based multinational company with which you are familiar.
Required
a) Check the location(s) in the annual report that gives disclosures related to the translation of foreign currency financial statements and foreign currency hedging.
b) Evaluate whether the company's foreign operations have a predominant functional currency.
c ) Evaluate the amount of remeasurement profit or loss, if any, reported in net income in each of the three most recent years.
d) Evaluate the amount of translation adjustment, if any, reported in other comprehensive income in each of the three most recent years. Describe the sign (positive or negative) of the translation adjustment in each of the three most recent years.
e) Determine whether the company hedges net investments in foreign operations. If so, evaluate the type(s) of hedging instrument used.