Why a company might prefer a foreign currency option

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Assignment: Inventory Cost Flow Assumptions

1. Compare and contrast the different inventory cost flow assumptions. Explain the consequences that result from the use of alternative inventory cost flow assumptions.

Interpretation of GAAP and Ethical Issues

2. Based on the information contained in Case C7-6: Interpretation of GAAP and Ethical Issues, could a LIFO liquidation profit create ethical issues? Defend your position.

Foreign Currency Transactions and International Financial Reporting Standards (IFRS)

3. Analyze the main reasons why a company might prefer a foreign currency option over a forward contract in hedging a foreign currency firm commitment. In contrast, analyze the main reasons why a company might prefer a forward contract over an option in hedging a foreign currency asset or liability. Determine the option (e.g. a foreign currency option or a forward contract) that you consider to be more effective. Provide a rationale for your response.

4. Assume that all the companies in the world use International Financial Reporting Standards (IFRS). Determine at least two (2) obstacles to the worldwide comparability of financial statements and provide one (1) strategy to overcome the obstacles in question. Provide support for your rationale.

Reference no: EM132306908

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