Reference no: EM131333532

International Accounting

1. When discussing foreign currency exchange, there are several arrangements. List two of these.

2. A _________ is a contract between two or more parties.

3. What are the timelines for the new revenue recognition standard for companies to implement?

4. On what financial statement(s) is/are derivatives listed and how are they valued?

5. Explain spot and forward rates.

6. What does the word hedging mean? Why do companies hedge foreign exchange risk?

7. List four common instruments underlying derivatives.

8. There are ten important things to know about the new revenue recognition guidance. List one of the ten and discuss what you think its impact will be.

9. Guidance for hedging can be found in what two IAS.

10. On December 1, 2015, El Primero Company purchases inventory from a foreign supplier for 40,000 coronas. Payment will be made in 90 days after El Primero has sold this merchandise. Sales are made rather quickly and El Primero pays this entire obligation on February 15, 2016. The following exchange rates for 1 corona apply:

Date                         US Dollar per Corona
December 1, 2015                $0.87
December 31, 2015              $0.82
February 15, 2016                $0.91

Prepare all journal entries for El Primero in connection with the purchase and payment. El Primero's fiscal year is calendar year.

11.The new lease standard requires that leases will be included on the Balance Sheet. There is an exemption to this new rule. What obligations will be exempt from inclusion on the Balance Sheet?

12.Match the terms in Column A with the appropriate definition in Column B. Place your answer where indicated.

A. Contract	A promise to transfer a good or service to the customer
B. Transaction Price	When control over good or service is transferred to a customer
C. Discount	Amount that vendor expects to be entitled to for transferring goods or services
D. Performance Obligations	Approved agreement between two or more parties that creates enforceable rights and obligations
E. Satisfied Obligation	The price at which an entity would sell a promised good or service separately to a customer
F. Disclosure	Information about amounts in financial statements

13. The new Revenue Recognition standard includes extensive disclosures. At this point there are three methods that a public company can use to present these disclosures. List those methods.

14. When discussing foreign currency exposure, there is no easy formula for a company to prepare themselves. Risk cascades through a company or an economy and sometimes with little or no warning. What is a recommendation to minimize this risk?