Discussion Assignment week 1

Intermediate Accounting

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(a) a. 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) 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 
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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....
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