valutarisk
Valutarisk, or foreign exchange risk, is the potential for financial losses due to movements in exchange rates between currencies. It arises when assets, liabilities, cash flows, or earnings are denominated in currencies other than an entity’s functional currency, or when a portfolio contains investments in foreign currencies. The main types are transaction exposure, translation exposure, and economic exposure. Transaction exposure concerns actual cash flows from contractual obligations in foreign currencies. Translation exposure affects the accounting value of foreign subsidiaries when consolidating financial statements, often influencing equity through accumulated other comprehensive income. Economic exposure reflects how exchange rate changes can alter a company’s future cash flows and competitive position, even absent specific transactions.
Measurement and management often involve scenario analysis, sensitivity testing, and, in some contexts, value-at-risk assessments. Companies
Impact and scope are broad: valutarisk can affect earnings, asset valuations, debt costs, and capital planning,