Pre-transaction risk and Prepayment: Difference between pages

Revision as of 20:29, 5 January 2018

1. Banking.

The non-contractual early repayment by bank customers of, for example, fixed rate mortgages.

2. Accounting.

An amount paid in advance for a financial benefit, represented by an asset in the organisation's balance sheet.

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-''Foreign exchange risk management''
+. ''Banking''.
-.
+The non-contractual early repayment by bank customers of, for example, fixed rate mortgages.
-Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements.
-For example, an exporter may need to publish a price list in the currency of its customers' local market.
+. ''Accounting''.
-Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs.
+An amount paid in advance for a financial benefit, represented by an asset in the organisation's balance sheet.
-Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure.
-.
-The same as Contingent risk as applied to currency management.
-Also known as pre-transactional risk, pre-transaction exposure or pre-transactional exposure.
 == See also ==
-* [[Contingent risk]]
+* [[Average effective maturity]]
-* [[Currency risk]]
+* [[Bookkeeping]]
-* [[Economic risk]]
+* [[Early Repayment Charge]]
-* [[Translation risk]]
+* [[Extension risk]]
-* [[Transaction risk]]
+* [[Prepayment risk]]
+* [[Prepayments]]
-[[Category:Manage_risks]]