Multiple Currencies
Risks and Accounting



Currency Risk Multi-currency Accounting
Avoiding the potholes that introduce distortion

- Defining the Objective - which number is it that should not move as exchange rates move ?

- Identifying Currency Risks
..... Including exposures arising from Corporate Income Tax and VAT
..... and avoiding common misconceptions
..... E.g. Currency of Exposure is not always Currency of Settlement

- Quantifying Currency Risks

- Reporting Currency Risks regularly

- Hedging Currency Risks

- Defining Policy and Responsibilities - precisely, but succinctly

- Assets and Liabilities in Different Currencies

- Businesses in Different Currencies

- Business Currency not the Currency of the Jurisdiction

- Avoiding distortions from Accounting
..... Currency Translation Adjustment
..... Location of intermediate holding companies
..... etc

- Multiple Base Currencies

- Difference between FX P&L and Gain/Loss from Movement in Exchange Rates

- The importance of defining currency, quantum and frequency of profit payaway ("internal dividends")

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