Please read the the following MacDonalds mini case and answer question 3 (click the web link and find the case as...

Q3. Should Anka- And Mc Donald’s Worry about OCI?
Answer:
According to the new accounting standard FAS 133, McDonald’s would require mark-to-market
the value of the outstanding swap regularly which is the (quarterly) basis, and the resulting
gains / losses on these swaps will be included in the Other Comprehensive Income (OCI). The
cross-currency swap is hedging actual cash flows which are moving between the subsidiary and
the parent, whereas the concern over FAS #133 is primarily an accounting-based measurement
issue. Thus there will be change in the IOC even if the actual cash flow is not there due to the
accounting adjustments.
The impact of the accounting standard will be the large...