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Table Of Contents

EXCHANGE RATES - MEANS OF TRANSLATION
MEASURED VERSUS DENOMINATED
FOREIGN CURRENCY TRANSACTIONS
Importing or Exporting of Goods or Services
December 1, 2003 - Date of Transaction
December 31, 2003 - Balance Sheet Date
March 1, 2004 - Settlement Date
Hedging Foreign Exchange Rate Risk
Forward Exchange Contracts
Which kind of forward contract to choose?
The valuation of a forward contract (intrinsic versus time
Why do forward rates differ from spot rates?
1. Hedges
2. Speculation
Forward contracts used to speculate changes in foreign
currency
USING FORWARD CONTRACTS AS A HEDGE
Hedge of a foreign currency exposed liability
Accounts Payable FC Receivable
Hedge of a foreign currency exposed asset
Fair Value Hedge - Hedging an Unrecognized Foreign Currency
Commitment
loss on a forward contract as well as the offsetting gain or loss
on the hedged item are recognized currently in earnings. The
Discounting the Fair Value of the Forward Contract
Cash Flow Hedge - Hedge of a forecasted transaction
Economic Hedge of a Net Investment in a Foreign Entity
Forward Contracts Acquired to Speculate in the Movement of
Disclosure Requirements of the Various Hedges
Using Options to Hedge Foreign Currency Changes
Other Forms of Foreign Borrowing or Lending
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Published by: Trizia Roanne Constantino on Apr 11, 2013
Copyright:Attribution Non-commercial

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