Mark Minihane and Fiona Thomson provide practical guidance on forex gains and losses
The volatility experienced in the foreign exchange markets in late 2008 shone a spotlight on forex management strategies adopted by groups and raised the issue of forex management on the agendas of both corporate treasurers and finance directors. However even when an effective hedging strategy is achieved from both a risk management and accounting perspective that is not the end of the story. Unexpected cash tax volatility may arise if the tax department is not involved with corporate treasury decision making processes even where there is no consolidated income statement exposure arising from forex.
So why is there cash tax volatility if there is no consolidated income statement volatility?
The problem stems from the fact that the entity of assessment from a risk management perspective is generally the consolidated group however from a corporation...
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Mark Minihane and Fiona Thomson provide practical guidance on forex gains and losses
The volatility experienced in the foreign exchange markets in late 2008 shone a spotlight on forex management strategies adopted by groups and raised the issue of forex management on the agendas of both corporate treasurers and finance directors. However even when an effective hedging strategy is achieved from both a risk management and accounting perspective that is not the end of the story. Unexpected cash tax volatility may arise if the tax department is not involved with corporate treasury decision making processes even where there is no consolidated income statement exposure arising from forex.
So why is there cash tax volatility if there is no consolidated income statement volatility?
The problem stems from the fact that the entity of assessment from a risk management perspective is generally the consolidated group however from a corporation...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
