{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Discussion Assignment week 1

Intermediate Accounting

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
(a) What investments does P&G report in 2007? a. In 2007 P&G reports $202,000,000 in investment securities.  b. In the  notes to consolidated financial statements  the securities consists of: i. Auction rate securities – approximate fair value ii. Readily marketable debt and equity securities – unrealized +/- charged to  earnings iii. Available-for-sale securities – unrealized +/- charged to shareholder’s  equity c. These are reported on the balance sheet under current assets. (b) How are P&G’s investments valued? a. Some financial instruments are recorded at fair value which is determined by  using market information, valuation methods- discounted cash flow analysis  being the principal method. Cash equivalents, short term debt, and other 
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: investments are recorded at cost which approximates fair value. (c) How does P&G use derivative financial instruments? a. As outlined in Note 6 P&G is affected by market risks such as: i. Credit risks ii. Fluctuations in interest rates iii. Foreign currency exchange rates b. To manage the above risks- P&G analyzes exposures on a consolidated basis with a use of logical exposure netting and correlation. For other exposures P&G utilizies financial transactions that follows their policies and practices. P&G does not hold or issue derivative financial instruments for speculative trading uses....
View Full Document

{[ snackBarMessage ]}