To complete the requirements of this exercise, access the most recent Form 10-K for both Exxon Mobil and Chevron. Required:

a. Determine whether each company’s foreign operations have a predominant functional currency. Discuss the implication this has for the comparability of financial statements between the two companies.

b. Determine the amount of translation adjustment, if any, reported in other comprehensive income in each of the three most recent years. Explain the sign (positive or negative) of the translation adjustment in each of the three most recent years. Compare the relative magnitude of the translation adjustments between the two companies.

c. Determine whether each company hedges the net investment in foreign operations. If so, determine the type(s) of hedging instrument(s) used.

d. Prepare a brief report comparing and contrasting the foreign currency translation and foreign currency hedging policies of these two companies.