Wolfgang Koester CEO, FiREapps
Wolfgang Koester CEO, FiREapps

Corporate FX Exposure Management: Embracing the new Risk Paradigm

Wolfgang Koester outlines why companies who continue to ignore their company’s foreign exchange exposure management processes will have to answer for them once today's currency-related profits have turned into unforeseen losses.

For many multinational corporations, the recent decline of the dollar has likely meant an unanticipated increase in revenues and profits. As a member of your company’s finance organization, did you lean back in your chair and smile with satisfaction at the words “increased revenues and profits?” Or, did you break into a cold sweat at the mere sight of the word “unanticipated” and pause to reflect for a moment? If you hesitated, congratulations! You’ve already picked up on a potential problem that most corporations have overlooked. After all, no surprise is a good surprise when you are talking about accounting practices—and most U.S. multinationals today have serious issues when it comes to multi-currency accounting and foreign exchange exposure management. In many cases today, the benefits of unexpected foreign exchange-related windfalls for companies have overshadowed potential warning signs about their foreign exchange exposure management practices. When the...continued

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