A foreign exchange hedge (FOREX hedge) is a method used by companies to eliminate or hedge foreign exchange risk resulting from transactions in foreign currencies (see Foreign exchange derivative). This is done using either the cash flow or the fair value method. The accounting rules for this are addressed by both the International Financial Reporting Standards (IFRS) and by the US Generally Accepted Accounting Principles (US GAAP).
Read more about Foreign Exchange Hedge: Foreign Exchange Risk, Hedge, Do Companies Hedge?
Famous quotes containing the words foreign, exchange and/or hedge:
“’Tis our true policy to steer clear of permanent alliances with any portion of the foreign world.”
—George Washington (1732–1799)
“The first place he went into was the Royal Exchange .... where men of all ages and all nations were assembled, with no other view than to barter for interest. The countenances of most of the people showed they were filled with anxiety; some indeed appeared pleased, but yet it was with a mixture of fear.... [David] resolved to stay no longer in a place where riches were esteemed goodness, and deceit, low cunning, and giving up all things to the love of gain were thought wisdom.”
—Sarah Fielding (1710–1768)
“Though bachelors be the strongest stakes, married men are the best binders, in the hedge of the commonwealth.”
—Thomas Fuller (1608–1661)