Case Study 1
This case presents the most common use of foreign currency forward contracts, which is
to manage a part of the foreign currency exposure from A/R or A/P denominated in
The forward contract is not designated as a hedge but ca
Partnerships Formation, Operation, and Changes in Membership
What is a Partnership?
An association of two or more persons who
are co-owners of a business, and
share profits and losses in an agreed-upon manner.
What is a Person?
Multinational Accounting Issues in Financial Reporting and Translation of Foreign Entity FS
Differences in Accounting Principles
U.S. accounting standards focus on the information needs of the common stockholder or
Significant strides have
Multinational Accounting: Foreign Currency Transactions and Financial Instruments
Doing Business in a Global Market
A U.S. entity may incur foreign currency risks whenever it conducts transactions in other
Ex: may experience foreign currency
Overview of Partnership Liquidations
The Uniform Partnership Act of 1997 includes seven sections which deal specifically with the dissolution
and winding up of a partnership.
Creditors have first claim to the partnerships asse
Schedule of Safe Payments
No cash to partners until AFTER all outside creditors are paid in full.
Before any cash goes to the partners, consider two hypothetical worst-case scenarios.
All non-cash assets worthless (distribute losses)
Assume partners a
A recurring set of business activities and related data processing operations
associated with the purchase of and payment for goods and services.
Activities in the expenditure cycle are mirror images of the basic activities in the
Translation vs Remeasurement of Foreign Financial Statements
Two methods are used to restate foreign entity FS to U.S. dollars:
Translation of the foreign entitys functional currency FS into U.S. dollars
Remeasurement of the foreign entitys FS to the
Segment and Interim Reporting
FASB 14 required the supplemental disclosure of revenue, profits, assets, and other
information for selected industry segments of an entity as well as disclosures about its
The Securities and Exchange Commission
The Securities and Exchange Commission (SEC) is an independent federal agency created in
1934 responsible for regulating securities markets
The ability of companies to raise capital in the stock markets