International Finance and Accounting Handbook

ternational treasury. Larger multinational firms will often possess such a large num- ber of foreign subsidiaries and affiliates ...

Firms that are searching for value-added activities within the firm (spinoffs, re- structuring) or from outside the firm (merge ...

most important real-time system innovation is that of electronic data interchange (EDI), a cross-industry standard format for da ...

(b) Stage 2. As multinational operations expand, international treasury continues to expand so that it is often duplicating all ...

(the whole, the region, the individual affiliate), disbursements, tax—influence the management process. 5.4 INTERNATIONAL CASH M ...

EDI and EFT avenues Same-day value basis transfers The parent firm, its treasury staff, and bank representatives would in turn ...

justifying the independent structure. The reinvoicing center, however, is not for everyone, given its separate incorporation nee ...

scope of this chapter on international treasury management, the complexity of estab- lishing a truly cost-effective cross-border ...

throughcentralization, can provide value-added processing and expertise to the sub- sidiary without absolving the subsidiary fro ...

gram. By isolating what will and will not be the subject of hedging will effectively limit the scale of the exposure management ...

benchmarking activities as important. Given the increasing role of treasury, and its ability to leverage its activities for the ...

6 • 1 CHAPTER 6 MANAGEMENT OF CORPORATE FOREIGN EXCHANGE RISK Gunter Dufey University of Michigan and McKinsey & Co. Ian H. ...

exchange market they should employ: forwards and futures; options or the specifica- tion of debt and assets? The chapter conclud ...

are in the business of manufacturing slot machines, and we should not be gambling on currencies.” Perhaps they are right to fear ...

cial as well as nonfinancial, can be observed to devote efforts and resources to the re- duction of risk. Obviously, corporation ...

situations where financial distress or even bankruptcy are encountered. Wages, debt service, and other fixed claims have to be m ...

issue. Various measures of corporate performance (such as earnings of the stock price) often represent a basis for upper-managem ...

The Purchasing Power Parity (PPP) theorem can be stated in different ways, but the most common representation links the changes ...

rate, his gain (the interest rate differential) will be offset by his expected loss because of foreign exchange rate changes. Th ...

minder is necessary because most commonly accepted notions of foreign exchange risk hedging deal with assets; that is, they are ...