What is Translation Exposure

Translation exposure is used in the context of international foreign exchange markets, translation exposure refers to the risk which a company or firm faces when its assets and liabilities are denominated in a foreign currency. It can be better understood with the help of an example, suppose a USA based company has assets and liabilities denominated in euro than if euro falls or rises with respect to dollar in foreign exchange market than the company has to record the profit or loss arising out of such fluctuation in the books of account. It is also known as accounting exposure.

0 comments… add one

Leave a Comment

Related pages

disadvantages of investing in stock marketperfect or pure competitiondisadvantages of traditional bankingod loan meaningwhat is trial balance & why it is preparedjournal entry for prepaid insurancewhat is job specialization what are its advantages and disadvantagesdifference between consignee and consignoraccounting concepts consistencyexplain the expenditure method of measuring national incomebills receivable journal entrydifference between price discrimination and price differentiationassumptions of diminishing marginal utilityexamples of process costingdefine floating currencycountries with planned economiesfor a monopolistic competitornondurable goods definitionmeaning cagrdemerit of internetdifference between fdi and fiiliquidity ratios listdisadvantages of transfer pricingskimming in marketingdisadvantages of command economyatm ka full formadvantages and disadvantages of markup pricingunitary demand exampleexamples of unsystematic riskscheduled commercial bank meaningadvantages and disadvantages of marketing strategybenefits of specialisationadvantages and disadvantages of evaconglomerate diversification strategyfullform of nasdaqdiff between micro and macro economicsfifo advantages and disadvantagesdisadvantages of a monopolydisadvantages of cashless policywhat does cross cheque meansaccounting fifo methoddecentralization disadvantagesdefine a mixed economyadvantages of mergerssteps on how to withdraw money from atmadvantages globalisationcapitalistic economykinds of factoringcrr & slrshort term loan advantages and disadvantagesstrap option strategymerits and demerits of bankingdefinition centrally planned economyadvantages and disadvantages of variable costingprogressive tax advantagesmerchant banking pptborder fence pros and consrent revenue journal entryprepaid insurance journal entrymarket skimming and market penetrationwhat is the difference between cumulative and noncumulative preferred stockaccrued income meaningdisadvantages of hire purchasediminishing marginal utility examplescharacteristics of authoritarian leadershipdifference between tariffs and quotasdu pont equationadvantages and disadvantages of equity shareselasticity of demand with examplesbenefits of absorption costingexamples of conglomerate companieswhat is systematic risk and unsystematic riskunitary elastic demandfactoring advantagessupplementary goods economicsdisadvantage of decentralisation