Transaction exposure deals with converting financial statements from foreign operations into consolidated reports of both foreign and domestic operations.

Question

Quizplus · Accepted Answer

Transaction exposure refers to the risk companies face when they have outstanding financial obligations (such as payables or receivables) in a foreign currency, and the value of those obligations changes due to fluctuations in exchange rates. Converting financial statements from foreign operations into consolidated reports is referred to as translation exposure.

Transaction Exposure Deals with Converting Financial Statements from Foreign Operations