Foreign currency forward contract

Foreign currency forward contract

Agreement that obligates its parties to exchange given quantities of currencies at a prespecified exchange rate on a certain future date.

Forward Currency Contract

An agreement between two parties to exchange two currencies at a given exchange rate at some point in the future, usually 30, 60, or 90 days hence. A forward currency contract mitigates foreign exchange risk for the parties and is most useful when both parties have operations or some other interest in a country using a given currency. Forward currency contracts are over-the-counter contracts.
References in periodicals archive ?
The fair value of a foreign currency forward contract will be affected by changes in the exchange rate, and the fair value of a put option for an available-for-sale security will be affected by changes in the fair value of the underlying security.
For example, assume a taxpayer undertakes to purchase a piece of equipment to be used in its trade or business and simultaneously enters into a foreign currency forward contract (because the contract price was denominated in a foreign currency) to "fix" the price of the equipment in U.
For certain foreign currency derivatives, such as a foreign currency forward contract, Sec.
The impact of the sale of equity investment in MIBRAG includes the loss on settlement of our foreign currency forward contract of $21.
Constellation had previously entered into a foreign currency forward contract in connection with the acquisition of Vincor to fix the U.
Caroline Rook, Chief Financial Officer, commented, "The realized portion of our foreign currency forward contract gain, or actual cash generated, was $4.
Some foreign currency forward contracts are less liquid, which may result in the Fund being unable to structure its hedging transactions as intended and may be unable to obtain sufficient liquidity in an underlying currency.
As a result, income before foreign currency forward contracts (gains)/losses, finance and income tax expenses of CAN 7.
Although the definition of a foreign currency contract provided in 1256(g)(2) may be read to include a foreign currency option contract, the legislative history of the Technical Corrections Act of 1982, which amended 1256 to include foreign currency contracts, indicates that the Congress intended to extend [section] 1256 treatment only to foreign currency forward contracts that are traded on the interbank market.
Risk strategies: Foreign currency forward contracts, interest rate swaps, commodity swaps.
d) Non-cash items include the effects of (i) stock-based compensation expense, (ii) purchase accounting, (iii) non-cash mark-to-market revaluation of foreign currency forward contracts and unrealized gains or losses on revaluations of the U.
Foreign currency forward contracts are individually negotiated and privately traded such that they are dependent upon the creditworthiness of the counterparty and subject to counterparty risk.

Full browser ?