Accounting exposure

Risk management. 1. The potential impact on an entity's accounts of a particular policy or transaction.

For example the effect on group accounts in applying accounting policies relating to the translation of assets and liabilities denominated in currencies other than the group's functional currency.

2. Potential secondary adverse effects resulting from accounting exposure (as defined above). For example the potential breach of a borrowings covenant.

See also

• Covenant
• Group accounts
• Translation exposure