Measuring Accounting Exposure. International Finance. Dr. A. DeMaskey. Learning Objectives. What are the three different types of foreign exchange exposures? What is accounting exposure and how is it measured?
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Dr. A. DeMaskey
Assets (Ps million) Liabilities (Ps million)
Cash, marketable securities 1,000 Current liabilities 47,000
Accounts receivables 50,000 Long-term debt 12,000
Inventory 32,000 Equity 135,000
Fixed assets 111,000
The exchange rate on January 1st was Ps 8,000/$ and on December 31st is Ps 12,000/$Measuring Translation Exposure: Illustration
Cash and Marketable Sec.
Net Fixed Assets
__________ ___________ __________ ________
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Note: The exchange rate on January 1st is Ps 8,000/$