Case C8 5 Question a only a What major problem might arise with intercompany debt between a domestic parent and a foreign subsidiary or between subsidiaries in different countries How has Hershey Foods dealt with this problem The major problem between a domestic parent and a foreign subsidiary is foreign currency exchange rates which affect U S dollar with country of the subsidiary or between subsidiaries When U S dollar is weakening the purchases or cost of goods and loans payable or receivable will increase This is risk of international business The accounting for derivatives and hedging activities have three standards of these situation which are FASB Statement No 133 Accounting for Derivative Instruments and Hedging Activities Statement No 138 Accounting for Certain Derivative Instruments and certain Hedging Activities and Statement No 149 Amendment of Statement 133 on Derivative Instruments and Hedging Activities
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