McDonald's Corporation operates in more than 100 countries. There are approximately 31,000 McDonald's restaurants worldwide; on...

 

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McDonald's Corporation operates in more than 100 countries. There are approximately 31,000 McDonald's restaurants worldwide; on an average day they serve over 58 million people. Most McDonald's restaurants are franchises owned and operated by independent local men and women. Operations outside the United States generate approximately 65 percent of corporate revenues. Because more than 95 percent of the world's population lives outside the United States, substantial profits can be generated from global sales. paid). But in Mexico, where inflation is much higher, asset values are adjusted for the impact of inflation. As a multinational business, McDonald's Corporation must comply with the rules and regulations of the countries where it operates. The United Nations is con- cerned that globalization of business makes it difficult for external stakeholders, including governments, to verify a multinational firm's data. The problem is con- sidered at least partly the result of a lack of uniform reporting requirements and standards. International Financial Reporting Standards have been developed that can be used for financial reporting by companies in The success of McDonald's is a function of the cor- poration's consistent quality standards, good manage- ment, and effective marketing that began in 1955. McDonald's accountants face several challenges when operating in global markets, such as: countries around the world; however, not all countries have agreed to use International Financial Reporting Standards. fluctuations in currency exchange and interest rates; QUESTIONS: • different tax rates and laws; 1) Why is it difficult to compare the financial statements of a U.S.company with those of a company in India or Germany? cost and deployment of capital; differing food, labor, and operating costs; and • diverse accounting policies and practices. 2) How would McDonald's benefit if International For example, financial reporting in the United States val- ues assets according to the historical cost (the amount Financial Reporting Standards were adopted for use in all countries worldwide? McDonald's Corporation operates in more than 100 countries. There are approximately 31,000 McDonald's restaurants worldwide; on an average day they serve over 58 million people. Most McDonald's restaurants are franchises owned and operated by independent local men and women. Operations outside the United States generate approximately 65 percent of corporate revenues. Because more than 95 percent of the world's population lives outside the United States, substantial profits can be generated from global sales. paid). But in Mexico, where inflation is much higher, asset values are adjusted for the impact of inflation. As a multinational business, McDonald's Corporation must comply with the rules and regulations of the countries where it operates. The United Nations is con- cerned that globalization of business makes it difficult for external stakeholders, including governments, to verify a multinational firm's data. The problem is con- sidered at least partly the result of a lack of uniform reporting requirements and standards. International Financial Reporting Standards have been developed that can be used for financial reporting by companies in The success of McDonald's is a function of the cor- poration's consistent quality standards, good manage- ment, and effective marketing that began in 1955. McDonald's accountants face several challenges when operating in global markets, such as: countries around the world; however, not all countries have agreed to use International Financial Reporting Standards. fluctuations in currency exchange and interest rates; QUESTIONS: • different tax rates and laws; 1) Why is it difficult to compare the financial statements of a U.S.company with those of a company in India or Germany? cost and deployment of capital; differing food, labor, and operating costs; and • diverse accounting policies and practices. 2) How would McDonald's benefit if International For example, financial reporting in the United States val- ues assets according to the historical cost (the amount Financial Reporting Standards were adopted for use in all countries worldwide?

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Answer 1 It is quite difficult to compare the financial statements of the co... View the full answer