A small part of the Financial Instruments footnote for PepsiCo is attached. Answer the following questions. 1.
Question:
A small part of the “Financial Instruments” footnote for PepsiCo is attached. Answer the following questions.
1. We see in reference (f) from the Fair Value Measurement that the fair value of interest rate swaps are based on LIBOR forward rates. You will need to look this one up. (4 points)
A. What does LIBOR stand for?
B. What five currencies are included in the LIBOR?
2. see that one item is “the location and net amount of gain or loss reported in earnings.” That sounds funny until we read this footnote. Looking at the Losses and Gains section, where are the following located? (6 points)
Losses/Gains in the income statement:
A. Foreign exchange derivative losses/gains
B. Interest rate derivative losses/gains
C. Commodity derivative losses/gains
Losses/Gains reclassified from the Statement of Comprehensive income to income statement:
D. Foreign exchange derivative losses/gains
E. Interest rate derivative losses/gains
F. Commodity derivative losses/gains
Financial Accounting
ISBN: 978-0134564142
6th Canadian edition
Authors: Walter Jr. Harrison, Charles T. Horngren, C. William Thomas, Greg Berberich, Catherine Seguin