Translation exposure,also frequently called accounting exposure,refers to the effect that an unanticipated change in exchange rates will have on the
A)choice of accounting methodology.
B)consolidated financial reports of a MNC.
C)firms competitive position.
D)cash flows realized from foreign operations.

Question

Quizplus · Accepted Answer

Translation exposure refers to the impact of exchange rate fluctuations on the consolidated financial reports of a multinational corporation (MNC). This relates to the translation of the financial statements of foreign subsidiaries into the reporting currency of the MNC. Any unexpected change in exchange rates could result in significant fluctuations in reported earnings and financial condition, leading to increased volatility and potential impact on investors' perception of the company.

Translation Exposure,also Frequently Called Accounting Exposure,refers to the Effect That