Balance Sheet Exposures Balance sheet exposures are the drivers of the FX Gains and Losses that impact earnings every month. They are monetary accounts like cash, accounts receivable, accounts payable, inter-company balances and more that are denominated in foreign currencies, so their values fluctuate and they are reported as gains/losses on a company’s financials. The […]
A majority of corporations identify and hedge balance sheet exposures. In fact, they are the most commonly hedged exposures by far. In order to do so, one must understand why balance sheet exposures pose a risk in the first place and how to identify which types of balances qualify as “balance sheet” exposures. Definition A […]
Currency movements affect internationally operating companies in many different ways. For example, when a U.S.-based firm sells goods and services in a foreign currency, their USD cash results fluctuate in relation to that foreign currency. When they consolidate foreign subsidiaries’ financials for reporting purposes, currency changes again impact their USD results. And when forward looking […]
As the London Inter-bank Offered Rate (LIBOR) begins to phase out, many corporate treasurers have been flooded by a wave of uncertainty. Our advice has been to proactively start planning alternatives by looking out for the guidance and term structures released by accounting regulatory bodies.
Motivational speaker Brian Tracy said: “Incorrect assumptions lie at the root of every failure. Have the courage to test your assumption”. Testing your assumptions is exactly what we plan to do.