Question

Carefully explain the primary differences between the losses from transaction exposure and the losses from translation exposure.

Carefully explain the primary differences between the losses from transaction exposure and the losses from translation exposure.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Transaction exposure occurs when companies buy or sell in different currencies. There is actual cash outflow or inflow. Hence there is actual profit or loss.

Translation exposure occurs due to consolidation of balance sheet of subsidiaries. There is currency exposure of assets and liabilities but these are notional losses or gains and not actual gains or losses.

Add a comment
Know the answer?
Add Answer to:
Carefully explain the primary differences between the losses from transaction exposure and the losses from translation exposure.
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT