When a multinational corporation's foreign assets and liabilities are exposed to losses and gains due to changing exchange rates, this is called accounting or translation exposure.

Question

Quizplus · Accepted Answer

This is because accounting or translation exposure refers to the impact of exchange rate fluctuations on the financial statements of a multinational corporation. This includes the assets and liabilities denominated in foreign currencies, which may be subject to translation gains or losses.

When a Multinational Corporation's Foreign Assets and Liabilities Are Exposed