• Corporate FX

Balance Sheet Hedging

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Please kindly contact Jack Georgeson directly regarding all Balance Sheet Hedging Questions and Enquiries.

Phone: +44 (0) 203 854 6802

Email: jackgeorgeson@gsnfx.co.uk

Balance Sheet FX Risk Management

Please kindly contact us via phone or email in the first instance if you are investigating corporate balance sheet hedging. If you currently conduct balance sheet hedging and are reviewing the terms of your agreements, such as credit, pricing and product, please kindly contact Jack Georgeson. If you are investigating and planning to start balance sheet hedging for the first time, it is best to get in touch to discuss your specific needs.

Balance Sheet Hedging

Balance Sheet FX Hedging

Balance Sheet Foreign Exchange Hedging

Do you currently hedge balance sheet translational risk using FX risk management products?

Do you currently use a corporate bank or FX broker to manage balance sheet hedging?

Are you considering introducing balance sheet hedging to help protect the value of company or group assets and liabilities against FX volatility?

Please reach out to us by phone or email to discuss your specific needs.

 

Balance Sheet Hedging Program

Balance Sheet FX Hedging

Do you currently have balance sheet FX hedging in place with a bank or FX broker?

Are you considering introducing balance sheet hedging and discussing with your bank or FX brokers?

Are you aiming to maximise your credit terms and FX hedge pricing for balance sheet hedging products?

We are very happy to discuss your specific requirements and aim to add value in all aspects of your current or planned balance sheet hedging program.

Please kindly reach out to us by phone or email for an initial discussion.

 

Balance Sheet Translation Hedging

FX Translational Hedging

Balance sheet hedging programmes are designed to protect global corporate foreign exchange assets and liabilities from value fluctuations due to FX market volatility. Balance sheet hedging focuses on a company or groups accounting exposure. It aims to risk manage the effects of exchange rate fluctuations on the corporate balance sheets.

Balance Sheet Hedging Examples

Corporate and Group Balance Sheet Hedging

Volatility and uncertainty in FX markets are key factors of the global marketplace and particularly relevant for the UK and sterling in recent years. Companies that do business internationally can manage translational accounting risks by using foreign exchange balance sheet hedging products, these include Forward Contracts and FX Options that can manage and hedge adverse impact of FX currency fluctuation. Balance sheet hedging allows companies and international groups to manage FX translational risks when reporting financial statements in their functional currency.

Common balance sheet hedging examples involve protecting the value of assets held in non-functional currencies. This can include fixed assets, debtors and receivables, liabilities both short-term and long-terms, and current assets such as cash holdings.

Balance Sheet hedging commonly uses Forward Contracts to secure the value of underlying non-functional assets and liabilities into the functional accounting currency.

Balance sheet hedging programmes help limit exposures and manage risks if FX Market fluctuations can have a material impact on the value of both assets and liabilities.

 

Balance Sheet Hedging Strategies

FX Forward Contracts and FX Options

The most common strategy to protect balance sheet translational risk uses FX Forward Contracts. For many companies and corporate structures this strategy is often viewed as the most appropriate and also the simplest method to implement.

Some professional clients may opt for a more advanced and complex hedging strategy using FX Options. If you are considering using FX Options or if you are a professional clients and currently utilise Structured FX Products for balance sheet hedging, please kindly reach out to us in the first instance by phone or email.

We would first need to understand more about your specific needs and objectives before discussing specific derivative or option products. We work with professional clients only when implementing FX Options due to the nature of the products and additional complexities when compared to other simpler strategies.

Balance Sheet Hedging with Forward Contracts

FX Forward Contracts for Balance Sheet FX Risk Management

A company that uses forward contracts is essentially fixing the exchange rate at which they buy or sell a pre-agreed amount of currency in the future. They are commonly used as an FX hedging tool due to the simple and often flexible nature of the product.

This is commonly a way to secure the value of balance sheet assets and liabilities by fixing the assets value into the functional accounting currency.

In some cases, balance sheet hedging contracts do not involve full settlement and delivery at maturity. For example, corporate groups may want to protect the value of balance sheet assets which will remain in non-functional currencies for extended on-going periods. These products are suitable for professional clients. In the first instance, please reach out to us by phone or email for a discussion. Based on appropriateness we can then discuss the mechanics of non-deliverable balance sheet hedging products.

Balance Sheet Translation Hedging

FX Translation Risk for Balance Sheet Assets and Liabilities

FX risks are commonly relevant when conducting business internationally and operating in global markets. The key decision of whether to hedge and manage FX exposures will vary. The need to hedge will often be linked to how material an impact FX volatility can have on businesses and global corporate groups.

The objectives of FX risk management should be business certainty and protection. If you are considering introducing balance sheet hedging and have a variety of questions, please kindly reach out to us for a no obligation discussion.

If you are currently hedging balance sheet risk with a bank or FX broker and would like to discuss more favourable terms or alternative strategies. Please get in touch, we are very happy to discuss your exact needs, challenges, appropriateness and objectives.

Balance Sheet Hedging Questions and Answers

Do You Hold Balance Sheet Assets and Liabilities in Multiple Currencies?

If you operate globally and hold assets and liabilities in non-functional currencies, this might have an impact on translational calculations when revalued to your accounting functional currency.


Do Balance Sheet Multi Currency Assets and Liabilities Fluctuate in Value Based on FX Movement?

If this already has an impact or could have a material impact on the value of balance sheet assets and liabilities, there are ways to manage this translational risk. 
Please reach out today by phone or email for a discussion. We’re very happy to discuss if we can help and there are no obligations.


Why Balance Sheet Hedge?

If you are exposed to FX risk due to multi-currency assets and liabilities in financial statements. Balance Sheet hedging can help manage this FX translational risk.


UK Corporate Balance Sheet Hedging Strategies

Are you a UK Corporate company with your functional/accounting currency in GBP? Do you hold assets and liabilities in non-functional currencies including USD and EUR? Do these multi-currency assets and liabilities create FX translational differences when revalued into pounds. We can help you manage this FX risk and limit the impact of foreign exchange volatility. Are you a UK company with significant overseas operations generated in Europe and Worldwide? When preparing group financial statements, are their FX losses and gains caused when reporting statements in pounds?


Non-Functional Currency Assets and Liabilities

Do you have corporate debtors and creditors held in non-operating currencies? What method do you currently use to revalue assets and liabilities into pounds? Will non-sterling balance sheet calculations remain in non-operating currencies at year-end? Does this have a material impact upon financial statement calculations when revaluing assets and liabilities into sterling?


Translation and Revaluation Risk

We can help you manage balance sheet non-functional currency risks and develop a balance sheet hedging program or add value to a current strategy. We can show you are variety of strategies and FX hedging solutions to help you make an informed decision. Equally, we can assess your current balance sheet hedging program and aim to add value in areas such as more favourable credit terms, more commercial pricing and show a number of alternative strategies and risk management products for comparison.

Contact Us

Phone: 0203 854 6802
Email: jackgeorgeson@gsnfx.co.uk

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