Netting revisited: essential but not for foreign exchange management
Article Abstract:
Netting is the accounting process through which all operating units within a corporation report their revenues and receipts for offsetting on a consolidated or a combined basis; this process can be complicated when foreign operating units introduce the problem of currency convertibility to the parent company's domestic currency. Netting is used by approximately half of all U.S. corporations, and the benefits realizable from netting include: decreased transfer costs, simplified foreign exchange conversions, and minimized float losses. Prior to implementing a netting procedure, the corporation should conduct a feasibility study to determine whether netting can be handled best in-house or by an outside institution (such as a bank), and analyze the possibility of using buy-sell agreements to purchase foreign currencies at spot rates as a hedge against foreign exchange risks.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1986
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Campaign '88 gives the foreign trade bill a toss
Article Abstract:
The presidential election campaign has caused uncertainty about the international trade bill and the Canadian Free Trade Agreement. Passage of the trade bill would greatly change the way in which trade issues are handled. The executive branch is granted more negotiating authority and Congress more involvement in the Uruguay round of the General Agreement on Tariffs and Trade talks. One provision of the bill is a feasibility study of an international debt center to buy troubled third-world loans at a discount and renegotiate those loans on more favorable terms for the borrowing country.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1988
User Contributions:
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