Translation Exposure

Translation Exposure
The risk that a company's equities, assets, liabilities or income will change in value as a result of exchange rate changes. This occurs when a firm denominates a portion of its equities, assets, liabilities or income in a foreign currency.


Also known as "accounting exposure".

Accountants use various methods to insulate firms from these types of risks, such as consolidation techniques for the firm's financial statements and the use of the most effective cost accounting evaluation procedures. In many cases, this exposure will be recorded in the financial statements as an exchange rate gain (or loss).


Investment dictionary. . 2012.

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Look at other dictionaries:

  • Translation Exposure — ⇡ Exposure …   Lexikon der Economics

  • translation exposure — accounting exposure A risk that arises from the translation of the assets and liabilities in a balance sheet into a foreign currency …   Accounting dictionary

  • Translation exposure — Risk of adverse effects on a firm s financial statements that may arise from changes in exchange rates. Related: transaction exposure. The New York Times Financial Glossary …   Financial and business terms

  • translation exposure — risk of adverse effects on a firm s financial statements that may arise from changes in exchange rates. Related: transaction exposure. Bloomberg Financial Dictionary …   Financial and business terms

  • Exposure — Begriff zur Kennzeichnung von ⇡ Währungsrisiken. Das Transaction E. bezieht sich auf bereits bestehende Forderungen und Verbindlichkeiten aus laufenden Transaktionen, die auf ausländische Währungen lauten und deren Werte sich durch eine… …   Lexikon der Economics

  • exchange-rate exposure — exchange rate risk; = foreign exchange rate risk The risk associated with uncertain exchange rates. The three types of risk are transaction exposure, translation exposure, and economic exposure …   Accounting dictionary

  • Transaction exposure — Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate. Related:translation exposure. The New York Times Financial Glossary …   Financial and business terms

  • transaction exposure — risk to a firm with known future cash flows in a foreign currency, that arises from possible changes in the exchange rate. Related: translation exposure. Bloomberg Financial Dictionary …   Financial and business terms

  • accounting exposure — See: translation exposure …   Accounting dictionary

  • Cumulative Translation Adjustment - CTA — An entry in the comprehensive income section of a translated balance sheet summarizing the gains/losses resulting from varying exchange rates over the years. A CTA entry is required under the Financial Accounting Standards Board (FASB) No.52 rule …   Investment dictionary

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