translation exposure

Translation exposure

Risk of adverse effects on a firm's financial statements that may arise from changes in exchange rates. Related: Transaction exposure.

Accounting Exposure

The risk that a company may suffer a reduction in value because a change in exchange rates reduces the value of its accounts or assets denominated in foreign currencies. That is, if a particular currency in which a company has some assets denominated decreases in value, the value of those assets also decreases with respect to the company's main currency. See also: Foreign exchange risk.

translation exposure

see EXCHANGE RATE EXPOSURE.
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References in periodicals archive ?
The net currency effect, when considering both transaction and translation exposure as well as volatility reductions, contributed somewhat positively to the operating income.
Such companies typically face three different types of FX exposure: transaction exposure, translation exposure and economic exposure.
Concentration on cash flow exposures makes economic sense but emphasis on pure translation exposure is misplaced.
The Group's policy is to align interest costs and operating profit of its major currencies in order to provide some protection against the translation exposure on foreign currency profits after tax.
The relevance of currency translation exposure on the valuation of single country closed end funds (SCCEFs) is examined, using net asset values (NAVs) and market prices of these funds--the two prices closed end funds have.
Translation exposure exists when the financial statements of a foreign subsidiary must be translated into U.
12 Managing Translation Exposure and Accounting for Financial Transactions.
Our Automotive segment absorbs most of the company's translation exposure.
Through the purchase of options, we created a "stop loss" on the translation exposure arising on our U.
PPOL monitors its currency exposures but does not hedge its translation exposures primarily due to the long-term nature of its investment.
We hedge only transactions we're very certain about and focus on hedging transaction exposures instead of translation exposures, primarily because we view the latter as long term.

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