Question

What does the word translation mean? Why is a translation exposure called an accounting exposure?

What does the word translation mean? Why is a translation exposure called an accounting exposure?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Translation means change or conversion. In the terms of translation exposure, translation is the change or conversion of a company assets, liabilities, equity in foreign currency and the risk associated with change or conversion or a company assets, liabilities, equity in foreign currency is known as translation exposure. The translation/ change/ conversion or a company assets. liabilities, equity in foreign currency mostly occurs due to the result of accounting process, the translation exposure is also known as accounting exposure. Translation exposure is the difference between exposed assets and total liabilities ( liabilities + equity). As we know, accounting deals with the golden equation of Assets = Liabilities + Equity. Hence, we see that translation and accounting deals with the same golden equation, therefore translation exposure is termed as accounting exposure.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What are the implications of translation exposure? Why would firms not hedge against it? What are...
What are the implications of translation exposure? Why would firms not hedge against it? What are the benefits if they do? Thanks!
4. Explain how accounting rules (and which ones) affect a multinational corporation’s translation exposure. Should a...
4. Explain how accounting rules (and which ones) affect a multinational corporation’s translation exposure. Should a firm be concerned about translation exposure?
What does unethical conduct mean? Word limit 200.
What does unethical conduct mean? Word limit 200.
Suggest the translation method that XYZ, Inc. should use in order to minimize balance sheet exposure....
Suggest the translation method that XYZ, Inc. should use in order to minimize balance sheet exposure. Provide support for you choice. Albert, CEO of XYZ, Inc., desires to expand the company’s sales through exports to three (3) foreign subsidiaries. Albert knows that the target subsidiaries are located in countries that require transactions to be denominated in the local currencies. Albert has researched foreign currency risk and knows that there is accounting exposure in accounting statements, operating exposure in future cash...
Which following statement is correct? I. Transaction exposure and operating exposure exist because of expected changes...
Which following statement is correct? I. Transaction exposure and operating exposure exist because of expected changes in future cash flows. II. Accounting exposure, also called translation exposure, is the potential for accounting-derived changes in owner’s equity to occur because of the need to “translate” foreign currency financial statements of foreign subsidiaries into a single reporting currency to prepare worldwide consolidated financial statements. III. The difference between transaction exposure and operating exposure is that operating exposure is concerned with future cash...
What does access to care mean to you. 100 word n less
What does access to care mean to you. 100 word n less
What exactly does the word balance mean in the title of the balance​ sheet? Why do...
What exactly does the word balance mean in the title of the balance​ sheet? Why do we balance the two​ halves?  ​(Select all the answers that​apply.) A. The total value of all of the​ firm's assets should equal the sum of its​ short- and​ long-term debt plus​ stockholder's equity. B. In order for the balance sheet to​ balance, stockholder's equity must exclude preferred​ stock, common stock at par​ value, paid in capital in excess of par on common stock and...
Why is Accounting called the "Language of Business" and describe the importance of managers knowing the...
Why is Accounting called the "Language of Business" and describe the importance of managers knowing the accounting function.
What is a mutation called if it is caused from exposure to environmental agents? A) spontaneous...
What is a mutation called if it is caused from exposure to environmental agents? A) spontaneous B) induced C) missense D) cancer
Protein synthesis is also called the translation process. What should be translated (translated) in this process?...
Protein synthesis is also called the translation process. What should be translated (translated) in this process? What happens to gene expression? Where and on which component of the cell does protein synthesis take place? Three different RNA molecules participate in protein synthesis. What function in protein synthesis do the three different RNA molecules have? What is meant by codon and anticodon in protein synthesis, respectively?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT