BusinessMarketing Topic: In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies and fruit.
Other intangible assets continue to be amortized over their useful lives. The Company has defined reporting units as each individual country for McDonald's restaurant business as well as each individual Partner Brand.
The annual goodwill impairment test compares the fair value of a reporting unit, generally based on discounted cash flows, with its carrying amount including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is measured as the difference between the fair value of reporting unit goodwill and the carrying amount of goodwill.
The impaired goodwill resulted primarily from businesses in Argentina, Uruguay and other markets in Latin America and the Middle East, where economies have weakened significantly in recent years. In addition, the Company completed its annual impairment testing of goodwill in the fourth quarter ofwhich resulted in no significant charges.
For purposes of annually reviewing McDonald's restaurant assets for potential impairment, assets are initially grouped together at a television market level in the U.
For Partner Brands, Mcdonalds accounting report are grouped by each individual brand. If an indicator of impairment e. If an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the Mcdonalds accounting report over its fair value as determined by an estimate of discounted future cash flows.
Losses on assets held for disposal are recognized when management has approved and committed to a plan to dispose of the assets, and the assets are available for disposal. Generally, such losses relate to either restaurants that have closed and ceased operations or businesses or restaurants that are available for sale.
The Company uses foreign currency denominated debt and derivative instruments to manage the impact of these changes. The Company does not use derivatives with a level of complexity or with a risk higher than the exposures to be hedged and does not hold or issue derivatives for trading purposes.
The counterparties to these agreements consist of a diverse group of financial institutions. The Company continually monitors its positions and the credit ratings of its counterparties, and adjusts positions as appropriate.
Certain of these agreements also require each party to post collateral if credit ratings fall below, or aggregate exposures exceed, certain contractual limits. Duringcertain counterparties were required to post collateral as aggregate exposures exceeded certain contractual limits due to increased values.
This designation is based upon the exposure being hedged. This adjustment was primarily related to interest-rate exchange agreements used to lock in long-term borrowing rates.
Fair value hedges The Company enters into fair value hedges to reduce the exposure to changes in the fair value of an asset or a liability, or an identified portion thereof, which is attributable to a particular risk.
The types of fair value hedges the Company enters into include: The foreign currency exchange agreements are entered into to hedge the currency risk associated with debt and intercompany loans denominated in foreign currencies, and essentially result in floating-rate assets or liabilities denominated in U.
Dollars or appropriate functional currencies. For fair value hedges, the gains or losses on derivatives as well as the offsetting gains or losses on the related hedged items are recognized in current earnings.
Cash flow hedges The Company enters into cash flow hedges to mitigate the exposure to variability in expected future cash flows attributable to a particular risk. The types of cash flow hedges the Company enters into include: The foreign currency exchange agreements hedge the currency risk associated with debt and intercompany loans denominated in foreign currencies, and essentially result in fixed-rate assets or liabilities denominated in U.
For cash flow hedges, the effective portion of the gains or losses on derivatives is reported in the deferred hedging adjustment component of accumulated other comprehensive income in shareholders' equity and reclassified into earnings in the same period or periods in which the hedged transaction affects earnings.
The remaining gain or loss in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in earnings during the period of change. Hedges of net investments in foreign operations The Company uses forward foreign exchange contracts and foreign currency denominated debt to hedge its investments in certain foreign subsidiaries and affiliates.ANNUAL OT Contents.
1. Introduction Report of the Chair of the IFRS Foundation Trustees 6 Trustees of the IFRS Foundation 9 Report of the Chair of the International Accounting Standards Board Oct 29, · A much-publicized report from the Centers for Disease Control (CDC) released earlier this month found that more than a third of Americans eat fast food daily.
The cash flow statement provides information about McDonald's Corp.'s cash receipts and cash payments during an accounting period, showing how these cash flaws link the ending cash balance to the beginning balance shown on McDonald's Corp.'s statement of financial position.
This report provides a detailed explanation of each diagnostic criterion and each rating for MCD. Appendix 1 offers an explanation accounting metrics because we make adjustments for all the issues listed in Figure 3. McDonalds Corp (MCD). Nov 28, · Best Answer: You should review the foot notes of their k filing.
They have to disclose their accounting policies including methods for estimate.
You Status: Resolved. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue. McDonald's Corp., Annual Reports. Item Description from equity method investments, income taxes, extraordinary items, cumulative effects of changes in accounting principles, and.