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  • How to Forecast Balance Sheet Exposures

    In order to mitigate foreign currency gains and losses, companies routinely hedge away currency risk associated with balance sheet exposures. Companies need to identify all monetary accounts on the balance sheet and aggregate the foreign amounts in those accounts.

  • How to Gather Balance Sheet Exposures

    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 […]

  • Understanding Balance Sheet Exposures

    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 Exposures and Common Hedge Types

    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 […]

  • Restoring Economic Integrity When Hedging Non-Economic Accounting Risk

    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.  

  • FX: A Hidden Reason for Missing the Mark in Cash Flow Forecasting

    Ever thought about how you should “convert” certain cash flows or, when you’re hedged, how that might impact the cash flow forecast? Cash flow forecasting is as much an art as it is a science, but there are some tangible hidden factors that you may not be contemplating in your current cash flow forecasting process. […]