International Accounting & Multinational Enterprises
Exercise 1
Required:
a) Explain how Acme Brush of Brazil's pretax income (in BRL) became a U.S.-dollar pretax loss.
b) Discuss whether Cooper Grant should be paid a bonus or not.
Exercise 2
Required:
a) Determine the number of foreign companies listed on the NYSE and the number of countries they represent.
b) Determine the five countries with the largest number of foreign companies listed on the NYSE.
c) Speculate as to why non-U.S. companies have gone to the effort to have their shares listed on the NYSE.
Case 1. Besserbrau AG
Required: Discuss the various international accounting issues confronted by Besserbrau AG.
Exercise 3
Required:
Answer the following questions and provide explanations for your answers.
a) Which is the greatest problem arising from worldwide accounting diversity?
b) Which group is most affected by worldwide accounting diversity?
c) Which group can most easily deal with the problems associated with accounting diversity?
Exercise 4
Required:
Consider each of the following factors that contribute to existing accounting diversity as described in this chapter:
• Legal system • Taxation • Providers of financing • Inflation • Political and economic ties • Culture
a) Which factor do you believe represents the greatest impediment to the international convergence of accounting?
b) Which factor do you believe creates the smallest impediment to convergence? Explain your reasoning.
Exercise 5
On May 19, 2004, the IASB published a single volume of its official pronouncements that will be applicable from January 1, 2005. Prepare a list of them.
Exercise 6
What is the cost of inventory in the current year?
Exercise 7
What is the depreciation expense for Year 1?
Case 5-1 (S.A. Harrington Company)
Exercise 8
Codification Exercise:
Access the codification database through your course shell and give a summary (1 paragraph) of each of the below references:
a) ASC 830-230-55-1:
b). ASC 505-20-25
c). ASC 908-360-25
Exercise 9
What was the net increase or decrease in cash flow from having purchased the foreign currency option to hedge this exposure to foreign exchange risk?
Exercise 10
Smith-Jones Company
Given the facts presented, discuss the various factors that affect the reliability of (1) the comparable uncontrolled price method, (2) the resale price method, and (3) the cost-plus method.
Exercise 11
Briefly explain the operating environment of a developing country of your choice using the framework that identifies the social, political, economic, and technological influences.
Exercise 11
Briefly discuss the complexities of developing a global business strategy for an MNC
Exercise 12
State whether you agree that globalization has made cultural values irrelevant as a factor influencing multinational business and accounting
CASE 2: LION NATHAN FACES REALITY!
Write a report identifying the main strategic issues and recommending the courses of action available to Lion in facing the current realities of this global initiative.