PwC and Knowledge@Wharton: How should global companies communicate currency risk?

January 2013
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How should global companies communicate currency risk?

At a glance

While many companies do a good job reporting on currency volatility, swings in currency valuations can make this process difficult. This paper outlines steps global companies can take to effectively communicate currency risk fluctuations.

Large swings in currency valuations can play havoc with financial reports. A company may have performed well in the latest quarter in a local currency. But if that currency lost value against the home currency, the translated performance can quickly move from good to lackluster or even into the red. The whole dynamic can work in reverse, of course, and provide the appearance of strong growth where it does not exist. While many companies do a good job reporting on currency volatility, a sizable number appear still to be grappling with the issue. In this paper, PwC and Wharton faculty offer some suggestions on how to cope.

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