Forex Hedge Accounting Treatment
OANDA’s FXConsulting
for Corporations
- 3 -
Introduction
Why Hedge?
Tapping into the global economy can be an effective way to expand your business. However, the
success of your company’s international business is tied to foreign exchange rate volatility, with
constant rate fluctuations contributing to unexpected profits or losses. Forex hedging is meant to reduce
the risk associated with a company’s exposure to foreign currency balances and transactions. It is in
your company’s best interests to recognize these risks and formulate a hedging strategy to safeguard
against currency fluctuations, thereby creating cost and revenue certainty for your foreign currency
transactions.
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