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Exchange rate differences - accounting and financial perspective
PAVLOVCOVÁ, Ester
This bachelor thesis deals with exchange rate differences from an accounting and financial perspective. The aim of the thesis is to describe possible accounting methodologies related to exchange rate differences and their impact on economic indicators in the theoretical part. The information found is applied to the selected company. The theoretical part deals with the definition of exchange rate differences, how they arise, types, and accounting. According to legislation, companies are obliged to keep their accounting in the Czech currency. For conversion from foreign currency to Czech currency, companies can choose between the daily and fixed exchange rate. In the practical part, a selected company is introduced and then analyzed for the years 2019-2021. The thesis further deals with modeling the company's revenues and liabilities using the daily, fixed monthly, fixed quarterly, and fixed annual exchange rates. This is followed by an analysis of the appropriate use of individual types of exchange rates according to the settlement of receivables and liabilities in individual years. The fourth part deals with hedging against exchange rate risk through average currency forwards. Potential use of functional currency for accounting is then described. The final part of the thesis is devoted to creating an internal directive for the proper determination and accounting of exchange rate differences. It concludes with suggestions and recommendations to reduce exchange rate risk.
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Exchange rate risk in the execution of payment transactions in the Chinese yuan and the possibility of its hedging
VOTAVA, Tomáš
This diploma thesis analyses an exchange rate risk of Czech companies related with business transactions in Chinese yuan in specific type examples and determines possibilities of an exchange rate risk hedging. In its theoretical part the diploma thesis generally describes issues of the international trade, China, the Chinese yuan, the exchange rate risk and the hedging. In its practical part the work models and analyses three business transactions in the Chinese yuan for the purpose of analysis of the exchange rate risk using fictitious companies and a simulation of their management behaviour including making wrong steps. Next, the work analyses a hedging offer from banks and non-banking companies in the Czech Republic. Based on the findings, the diploma thesis proposes if and how the fictitious companies should use the exchange rate risk hedging in order to minimalize an exchange rate loss and suggests the path leading to the exchange risk management optimization of companies for example using sophisticated risk management methods or entering the financial markets. Last but not least, modelled transactions are tested by E-start application in order to propose an optimization in case of using of the application by fictitious companies.
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Exchange rate differences - accounting and financial
ŠEJBA, Roman
Exchange rate differences arise from Accountancy Law No. 563/1991 Coll. According to this law, accounting entities have to keep books of accounts in Czech currency. Main objective of this work is to present what exchange rates differences mean, how they are created and how the rate profit or loss can affect economical indicators. Detected information is applied in a selected company. Exchange rates are very important in international business transaction. It interferes with accounting and finance. Rates are very important in the field of accounting. Accounting entities choose between fixed and daily rates, they prefer daily rates to fixed rates. The main objective in the field of finance is to find out effective protection against exchange rate loss, because most of companies are not protected against exchange rate loss. Another interesting part is comparison between Czech laws and International laws.
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