- Unit VII Case Study
Complete both parts of this assignment and submit as a single document. Part One
Based upon recording balance of payment (BOP) transactions, determine whether or not the following is a debit, credit, or no entry to the U.S. Balance of Payment statement. Also determine what chart of account is affected (i.e., CA, KA, or OSB):
- U.S. resident purchases Mercedes Benz C230,
- U.S. resident purchases Chevelot Impala,
- foreigner purchases GE dryer,
- U.S. resident purchases UK stock, and
- U.S. resident borrows funds from British broker to purchase stock
Read the case study, pp. 759-762, “H&M: The Challenges of Global Expansion and the Move to Adopt International Financial Reporting Standards.” Answer questions 19-3 and 19-4 at the end of the case study and the questions listed below. Your response for all four questions should be at least three pages in length and follow APA style guidelines.
- What type of exposure could the CFO of H&M in the U.S. be subjected to since H&M is based in Sweden and the financial statements are prepared according to IFRS?
- Payments or liabilities may also be subjected to exposure. Explain the operational hedging strategies that may offset exposure.