The second exchange rate adjustment occurs when the local currency the company receives in payment
from local retailers and online buyers over the course of a year in Europe-Africa (where all sales
transactions are tied to the €), Latin America (where all sales are tied to the Brazilian real), and Asia-
Pacific (where all sales are tied to the Sing$) must be converted to US$ for financial reporting purposes—
the company’s financial statements are always reported in US$. The essence of this second exchange rate
adjustment calls for the net revenues the company actually receives on footwear shipped to retailers and
online buyers in various parts of the world to reflect year-to-year exchange rate differences as follows: