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Analysing and Interpreting Foreign Currency Translation Effects and Non-GAAP Disclosures Kellogg Co. reports the following table and discussion in its 2015 10-K for its reportable segments. a. Kellogg reported consolidated sales decreased by 7.2% during 2015. What geographic segment accounted for this overall decrease? b. Kellogg reports “Comparable growth” that shows various adjustments to reported growth numbers. Explain why Kellogg provides this information in its financial statements. Explain the item labelled “Difference in shipping days.” c. How did foreign currency exchange rates affect sales at each of the geographic segments? What can we infer about the strength of the $US vis-à-vis the currencies in Kellogg’s segments? d. Describe how the accounting for foreign exchange translation affects reported sales and profits. e. How does Kellogg manage the risk related to its foreign exchange exposure? Describe the financial statement effects of this risk management activity.
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