Sony Corporation is global business that produces a wide variety of entertainment products, including electronics, music, movies, PlayStation. Sony's 2008 Annual Report states (page 74):
A large proportion of Sony's consolidated financial results, assets and liabilities is accounted for in currencies other than the Japanese yen.
For example, only 23% of sales and operating revenues in the fiscal year ended March 31, 2008 were originally recorded in Japan. Find Sony's most recent annual report on its website.
After reviewing the financial statements including the footnote on foreign currency translation, refer to the operating and Financial Review in the Financial section for a discussion of the implications of currency fluctuations on Sony's financial results.
What impact does the globalization of Sony's business have on its reported earnings and balance sheet?
What strategies do global companies employ to try to manage the risks associated with exchange rate fluctuations? How effective are these strategies?
Are issues related to exchange rate fluctuations likely to become more or less common in financial reporting in the future?