Accounting for exchange rate risk, Accounting Standards

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Accounting for exchange rate risk

Accounting for Exchange Rate Risk

Response to the following problem:

Carson Co. is considering a 10-year project in Hong Kong, where the Hong Kong dollar is tied to the U.S. dollar. Carson Co. uses sensitivity analysis that allows for alternative exchange rate scenarios. Why would Carson use this approach rather than using the pegged exchange rate as its exchange rate forecast in every year?

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Accounting Standards: Accounting for exchange rate risk

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