Translation exposure is the possibility that the book value of shareholders funds may change as a result of movement in exchange rates. Translation exposure arises when preparing financial statements for a company which has foreign subsidiaries. Translation into the home currency in consolidated financial statement my result in a translation gain or loss which will affect the book value of owners equity A profit and loss account for a year, denominated in a foreign currency, may be translated into the home currency at the average exchange rate that applied during the year or at the exchange rate that applied at the end of the year (the closing rate). For the balance sheet monetary assets and liabilities denominated in a foreign currency should be translated using the closing rate. On the other hand, there may be no translation exposures in the case of non-monetary assets. Translation exposure is the possibility that the book value of shareholders funds may change as a result of movement in exchange rates. Translation exposure arises when preparing financial statements for a company which has foreign subsidiaries. Translation into the home currency in consolidated financial statement my result in a translation gain or loss which will affect the book value of owners equity A profit and loss account for a year, denominated in a foreign currency, may be translated into the home currency at the average exchange rate that applied during the year or at the exchange rate that applied at the end of the year (the closing rate). For the balance sheet monetary assets and liabilities denominated in a foreign currency should be translated using the closing rate. On the other hand, there may be no translation exposures in the case of non-monetary assets. Translation exposure is the possibility that the book value of shareholders funds may change as a result of movement in exchange rates. Translation exposure arises when preparing financial statements for a company which has foreign subsidiaries. Translation into the home currency in consolidated financial statement my result in a translation gain or loss which will affect the book value of owners equity A profit and loss account for a year, denominated in a foreign currency, may be translated into the home currency at the average exchange rate that applied during the year or at the exchange rate that applied at the end of the year (the closing rate). For the balance sheet monetary assets and liabilities denominated in a foreign currency should be translated using the closing rate. On the other hand, there may be no translation exposures in the case of non-monetary assets. Translation exposure is the possibility that the book value of shareholders funds may change as a result of movement in exchange rates. Translation exposure arises when preparing financial statements for a company which has foreign subsidiaries. Translation into the home currency in consolidated financial statement my result in a translation gain or loss which will affect the book value of owners equity A profit and loss account for a year, denominated in a foreign currency, may be translated into the home currency at the average exchange rate that applied during the year or at the exchange rate that applied at the end of the year (the closing rate). For the balance sheet monetary assets and liabilities denominated in a foreign currency should be translated using the closing rate. On the other hand, there may be no translation exposures in the case of non-monetary assets.