Translation exposure
risk of adverse effects on a firm's financial statements that may arise from changes in exchange rates. |
Similar financial terms
Cumulative Translation Adjustment (CTA) accountAn entry in a translated balance sheet in which gains and/or losses from translation have been accumulated over a period of years. The CTA account is required under the FASB No. 52 rule.
Exposure
The maximum loss suffered from a default by a counterparty.
Accounting exposure
The change in the value of a firm's foreign currency denominated accounts due to a change in exchange rates.
Transaction exposure
Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate.
Operating exposure
Degree to which exchange rate changes, in combination with price changes, will alter a company's future operating cash flows.
