The notes to the financial statements are an integral part of a company’s annual report. Users of financial information need to understand the notes to accurately analyze a company. Harmonization does not exist on information included and calculations released in footnote disclosures. Below is a footnote disclosure from AT&T’s 2007 Annual Report regarding foreign currency translation. The footnote below follows U.S. GAAP.
Foreign Currency Translation
Our foreign investments and foreign subsidiaries generally report their earnings in their local currencies. We translate our share of their foreign assets and liabilities at exchange rates in effect at the balance sheet dates. We translate our share of their revenues and expenses using average rates during the year. The resulting foreign currency translation adjustments are recorded as a separate component of accumulated other comprehensive income in the accompanying consolidated balance sheets. Gains and losses resulting from exchange-rate changes on transactions denominated in a currency other than the local currency are included in earnings as incurred. We have also entered into foreign currency contracts to minimize our exposure to risk of adverse changes in currency exchange rates. We are subject to foreign exchange risk for foreign currency-denominated transactions, such as debt issued, recognized payables and receivables and forecasted transactions. At December 31, 2007, our foreign currency exposures were principally Euros, British pound sterling, Danish krone and Japanese yen.
Rewrite the footnote based upon the GAAP of the country that you selected for your course project.
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