Setting New Standards Coca-Cola is a global business that operates in approximately 200 countries. The majority of its operating income is generated outside the United States. In its 1995 annual report, the president and chief operating officer responded to questions about Coca-Cola's sales, market- ing, and operations. Questions about Coca-Cola's Middle and Far East Group, Latin America Group, and Africa Group included references to the anti-multinational sentiment that exists in India, the economic difficulties of Mexico and Argentina, and the economic impact of an oil strike that crippled Nigeria's economy in 1994. In its "Management's Discussion and Analysis," Coca-Cola notes that it is "uniquely positioned to benefit from operating in a vari- ety of currencies, as downturns in one region are often offset by strengths in others." "7 In recent years, many other companies have been expanding their operations into underdeveloped countries. These countries may have unstable economies and govern- ments. Many users of financial statements are concerned that the assets invested in these countries are commingled with other company assets.

Required Write clear, concise answers to the following questions:

1. As a potential investor, why would you be concerned if Coca-Cola co-mingles its as- sets in foreign countries with those in the United States? 2. To which accounting assumption would you refer if you wanted the profession to consider a change in the way these assets are reported? Which organizations would you write? Write a letter to the organization that you believe would be most effective in acting on your recommendation to report assets invested in underdeveloped coun- tries in a different manner.