Scenario C. Engaging In International Business - 885 Words

Scenario C Engaging in international business provides many benefits, but also increases complications. One of the most arduous complications is addressing additional regulations set forth by both domestic and international regulatory bodies. By engaging in international business, businesses headquartered in the United States with subsidiaries abroad must provide financial statements of all foreign operations restated in the U.S. Dollar. Depending on the functional currency of the subsidiary, financial statements must be translated into U.S. Dollar pursuant to either the Current Rate method, or the Temporal method. As explained by The Utes’ executive team, the functional currency of UDC is the U.S. Dollar, requiring The Utes to restate UDC†¦show more content†¦After calculating Net Income, I was able to calculate the proper Retained Earnings value for year-3, and then confirm that the value put the balance sheet in equilibrium. The Temporal translation method requires certain as sets and liabilities to be translated at the current exchange rate, and others at the historical exchange rate. Those that are translated at the current exchange rate will have values that change as a function of the current exchange rate. These items are exposed to translation adjustments, and alter UDC’s balance sheet exposure every reporting period. UDC had a total monetary asset value of $6,611,688; and a total monetary liability value of $3,894,188; thus, resulting in a net monetary asset position of $3,894,188, meaning UDC was net asset exposed at EOY 3. When net asset exposure is coupled with foreign currency appreciation, the result is a remeasurement gain. UDC experienced a remeasurement gain of $918,839, which constitutes 23.85% of net income for the year. As observed, net income can be largely affected by remeasurement gains and losses. Translation adjustments aren’t realized through inflows or outflows of cash; however, they can be particularly alarming to investors who focus on earnings-per-share, price-earnings, or other accounting ratios. Despite the fact UDC experienced a remeasurement gain for the year, a remeasurement loss was equallyShow MoreRelatedMarketing Ch-91075 Words   |  5 Pageschoice that best completes the statement or answers the question. _C___ 1. According to your text, ____ are small technology-based firms operating in international markets within two years of their establishment and realizing as much as 70 percent of their sales outside the domestic home market. a.|natural globals| b.|multinational corporations| c.|born globals| d.|born multinationals| e.|multinational enterprises| __B__ 2. The Mont Blanc Company plans to export expensive consumerRead MoreSocial Responsibility in Stakeholder Theory1509 Words   |  7 Pagesbased on stakeholder theory. 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