translation exposure

Translation exposure

Risk of adverse effects on a firm's financial statements that may arise from changes in exchange rates. Related: Transaction exposure.

Accounting Exposure

The risk that a company may suffer a reduction in value because a change in exchange rates reduces the value of its accounts or assets denominated in foreign currencies. That is, if a particular currency in which a company has some assets denominated decreases in value, the value of those assets also decreases with respect to the company's main currency. See also: Foreign exchange risk.

translation exposure

see EXCHANGE RATE EXPOSURE.