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Google's foreign currency translation risks

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Please help assessing the risk to Google related to foreign currency translations, foreign economic events, and international financial reporting standard requirements in order to summarize the risk tolerance level for Google.

Please provide references

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International Risks

Google operates business at an international level, so foreign exchange risk management programs are needed to manage foreign transactions and risks. The company expands advertising programs and other products to international markets that increase its exposure to fluctuations in foreign currency to U.S. dollar exchange rates (Fight, 2004). For this, the company has a foreign exchange risk management program that is designed to reduce exposure to fluctuations in foreign currency exchange rates. At the same time, this program will not fully offset the effect of fluctuations on revenues and earnings.

Foreign Currency Translations

The functional currency of international subsidiaries is the local currency. Google translates the financial statements of these subsidiaries to U.S. dollars by using month-end rates of exchange for assets and liabilities. In addition, it charges average rates of exchange for revenues, costs, and expenses. The company recorded $77 million of net translation gains in 2009, $124 million of net translation losses in 2010, and $107 million of net translation losses in ...

Solution Summary

The expert examines Google's foreign currency translation risks. The financial reporting standard requirements are determined.

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Description of environmental analysis

Please help me so that I can complete the following:

An organization's external environment has three components: the remote environment (macroeconomic), the industry environment, and the operating environment (in the organization itself). Conduct an environmental analysis using your organization or an organization with which you are familiar.
Your analysis should include the following:
a. Identify the industry in which your organization operates.
b. Identify key macroeconomic variables that affect your industry.
c. Choose two macroeconomic variables from item b. Identify and locate in the Library and government databases the corresponding industry variable. For the last five years, create two charts. Each chart will include the macroeconomic variable and the corresponding industry variable.
d. Based on the environmental scan completed in items b. and c. above, what challenges and opportunities exist for your firm in the operating environment?
For additional information, please visit the University of Phoenix Library. Select Country Profiles and Economic Data, and select any of the major databases: CountryWatch, EIU Country Intelligence, EIU Data Services, or EIU Viewswire. You may also access the Links Library by going to the rEsourceSM course page and clicking on "Links Library." Here you will be directed to various sources of information, including the Bureau of Labor Statistics (http://stats.bls.gov/), the U.S. Department of Commerce Bureau of Economic Analysis (http://www.bea.gov/), the U.S. Department of Commerce Economics and Statistics Administration (http://www.esa.doc.gov), and the Federal Reserve Bank of St. Louis (http://research.stlouisfed.org/). Sources of economic forecasts are also the Congressional Budget Office (http://www.cbo.gov/), the Federal Reserve (http://www.federalreserve.gov/), the Mortgage Banker's Association (http://www.mbaa.org/), and the Conference Board (http://www.conference-board.org/).

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