Translation Risk

Translation Risk

The risk of changes in the reported home currency accounting results of foreign operations due to changes in currency exchange rates.

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.