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Calculating Currency Exposure

December 11, 2015

Exposure:

  • Temporal Method Exposure:
    • = (cash + A/R) – (A/P + current debt + long term debt)
    • = Net monetary liability most likely
  • Current Rate Method Exposure:
    • = assets – liabilities = shareholder’s equity
    • Net Asset Position always

Insight:

These are the balance sheet accounts that are affected by the current rate for each method.

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