1. Can you determine between an exposed net asset position and an exposed net liability position? 2. Great proposal! You made this proposal very clear on what hedge accounting was and how it could effect Rainy Day’s financials. I agree with your statement “If hedge accounting is allowed, the effect on earnings of the derivative will be offset by the changes in the fair value of the bond investment”. What are some ways a company from the US can manage the risk of changes in the exchange rate for foreign currencies? QUESTIONS 3.This is a very straightforward problem but why do you think investors and stakeholders want to have business segments information? 4. You have correctly determined that all the segments except for “Security Systems” are reportable segments. GAAP requires businesses to report on business segments that meet certain thresholds in financial statements and the notes. These disclosures would give the users a better understanding of the business and its make up. What are your thoughts on these? Why are these disclosure relevant to users of the financial statements? Why is having an understanding of the business segments important? Attached is the questions but with background information to give better understanding.