It’s mission-critical for companies to protect their margins, revenues, and expenses from unnecessary volatility. A lot of the time, volatility comes from currency changes — or, foreign exchange risk. Whether it’s for meeting management targets,...
January
15,
2020
Posted by
Jeff Goggins
Most treasury professionals are comfortable gathering and netting down same currency exposures that go in opposite directions. For example, one might hedge GBP receivables net of GBP payables in a single sell forward balance sheet hedge. As...
January
02,
2020
Posted by
Jeff Goggins
Translation and transaction accounting are often confused for one another — but the difference between them is important. How can you tell them apart? Knowing which rates and which rules to apply are all it takes to understand the difference...
December
19,
2019
Posted by
Lorraine Popylisen
If your company transacts internationally, you know you need to use exchange rates to not only convert foreign currency transactions from the local currency into USD but also to translate foreign currency financial statements. In this blog, we’ll...
December
16,
2019
Posted by
Jeff Goggins
Cash flow risk is defined as the variability of functional cash flows for an anticipated transaction or on an existing asset/liability due to a particular risk (in this case, foreign currency risk). Companies often use Cash Flow hedges to protect...
December
04,
2019
Posted by
Jeff Goggins
ASC 830 provides guidelines on how to determine the functional currency of an entity. This is typically an election made by management based on the economic environment in which the company operates — but the process is more complex than that. ...
November
25,
2019
Posted by
Helen Kane
Treasuries use cash pooling — also known as a cash sweeping system — to provide liquidity to legal entities, aggregate cash for investment or to accelerate debt repayment. Cash Pooling ABC Corporation deploys an international treasury center so...
November
11,
2019
Posted by
Glenn Suarez
How and why companies hedge foreign currency risk depends on factors such as the industry, risk management acumen and management team perspective. But most public corporations do hedge their FX risk for one reason or another.
August
28,
2019
Posted by
Sandra Koch
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...
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