Chapter 11: Analysis of Global Operations

In this section

• Foreign Currency Transactions
  Master the essentials of accounting for foreign currency transactions, including IAS 21 and ASC 830 principles, remeasurement processes, realized vs. unrealized gains or losses, and best practices for mitigating risks.
• Translation of Foreign Currency Financial Statements
  Learn how to translate foreign currency financial statements into a parent’s reporting currency under IFRS and US GAAP, exploring the Current Rate Method and the Temporal Method, as well as real-world examples, best practices, and potential pitfalls.
• Exchange Rate Effects on Reported Performance
  Discover how currency fluctuations influence financial statements, the distinction between transaction and translation exposures, and practical tips for global operation analysis.
• Multinational Disclosures and Considerations
  Explore how multinational firms disclose geographical data, currency exposures, and foreign operations risks under IFRS 8 and ASC 280, helping analysts evaluate segment performance and global portfolio decisions.
• Functional vs. Presentation Currency
  In-depth exploration of selecting functional currency, handling mismatches with presentation currency, and managing translation adjustments in global consolidated statements.
• Hedge Accounting for Foreign Currency Transactions
  Master the principles of hedge accounting for foreign currency exposures under IFRS 9 and ASC 815, including fair value, cash flow, and net investment hedges, along with documentation requirements and effectiveness testing.
• Hyperinflationary Accounting and Effects on Consolidations
  Explore IFRS and US GAAP treatments for hyperinflation, restatement of financial statements, and key considerations when consolidating subsidiaries operating in hyperinflationary economies.
• Transfer Pricing in Global Operations
  Deep dive into the intricacies of setting intercompany transaction prices, arm’s length principles, and how transfer pricing strategies shape financial statements and tax liabilities in multinational enterprises.
• Interim Foreign Currency Translation Issues
  Learn how foreign currency exchange rate changes and IFRS/GAAP guidelines affect interim reporting for multinational corporations, focusing on average rates, seasonality, and best practices to maintain consistent financial statements.