International accounting Essay Example | Topics and Well Written Essays - 1750 words

International accounting - Essay ExampleThus the exchange rates were low pressure heading to period leading to intense depreciation at the sentence of a conscienceless fall in the global jeopardize sentiments forcing RBI to interrupt so as to stabilize the unit of domestic currency. As for the international currency the border has entered into the contract of foreign currency derivative with its customers to put them off on matched basis in the inter-bank market. The foreign currency hedging is made on the spreads on the customer transactions. The risk management body of the follow undertakes hedging and the methods are thus used for assessing the persuasiveness of hedging. The hedging taking place may be against a single li skill or plus or a portfolio of the same (HDFC bank Ltd., 2012, pp.110-124). Extent and Nature of Foreign Currency Exposure The Bank has entered into derivatives and foreign exchange deals after setting up counterparty credit limits on the basis of th e counterpartys ability to meet obligations in the event of foreign currency exposure. For such like endeavors the bank does not grant any market risks but only carries the credit risk associated with the counterparty. The Bank generally maintains a planning for the standard assets inclusive of the credit exposures on the basis of current market to market value of involvement rate and gold and foreign exchange derivatives contract at stipulated level by the RBI from time to time. For the overseas branches of HDFC the provisions are maintained at a much higher level by the respective regulator of RBI. The effect of translation exposure of the attach to has resulted in translation reserve of the company amounting to Rs. 251,651,000 on 31st March, 2012. However, the treasury segment usually consists of the exonerate interest earnings from the banks investment portfolio, money market lending and borrowing, losses or gains on the investment operation and on account of trading in der ivatives contract and foreign exchange. The non-monetary as well as the monetary foreign liabilities and assets of non integral foreign operations. These are then translated based on the rates of closing exchange notified by FEDAI related to the Balance Sheet date thereby resulting in profit or loss of the company that arises out of exchange differences which gets compiled in the Foreign Currency Translation Account till the disposal of the net investment in the non integral foreign operations (Raynor, 1999, p.156). Major risks of the business Since the intensification of the global financial crisis of 2008, risk related to the domestic growth of the company was a hindrance faced from the external environment of the company. The Bank also faces risk related to the Technology Risk Management of the company generally resulting in the cyber fraud. The different critical risks faced by the bank are the operational risk, credit risk and the market risk. accredit risk aroused from the n on-payment of the loaned amount of the company whereas the market risk associated with the interest rate risk and the liquidity risk of the company. Th