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):
1. U.S. resident purchases Mercedes Benz C230,
2. U.S. resident purchases Chevelot Impala,
3. foreigner purchases GE dryer,
4. U.S. resident purchases UK stock, and
5. 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.
19-3. If an investor wants to compare the financial results of the Gap, Index, and H&M. what difference does it make that their financial statements are prepared according to different GAAP? Would you expect there to be a big difference between U.S. GAAP as used by the GAP and IFRS as used by H&M and Inditex?
19-4. Waht are the major sources of influences o H&M’s accounting standards and practice?