The FX risk policy establishes the principles of dealing with FX risks and defines the processes, responsibilities and limits of FX risk management. Our specialists can assist with evaluating your existing FX risk policy and formulate a new one, if necessary. The FX risk policy may be either self-standing or part of a risk and/or finance policy.

For successful FX management, it is essential to understand how FX risks affect your company. We help our customers analyse the effects of various types of FX risks (transaction and translation risk, economic risk) on the income statement and balance sheet.

Knowing your company’s risk-bearing capacity and the various types of FX risks provides an important basis for subsequent hedge decisions. When choosing a hedge strategy for future and existing contractually fixed transactions, it is important to consider the effects of exchange rate fluctuations on performance indicators such as the margin and EBIT. For the translation of balance sheet items in foreign currencies, we focus our analysis on how exchange rate fluctuations affect the consolidated equity and equity ratio.

Budget and forecasting processes form an integral part of FX management. They are combined in the form of rolling or partially rolling forecasts adapted to the business model. In planning, the focus is placed on the key value drivers. For optimal efficiency and flexibility, as many planning elements as possible are standardised and automated. Using scenarios, future developments can be simulated transparently as a basis for the company’s FX management.

With Hedge Accounting, the underlying transaction and the related hedging transaction can be accounted for on an accrual basis. The complex rules of IAS 39 previously prevented many companies from performing hedges that are economically correct. We help our customers introduce IFRS 9, which substantially simplifies Hedge Accounting.

The interest risk policy establishes the principles of dealing with interest risks and defines the processes, responsibilities and limits of interest risk management. Our specialists can assist with evaluating your existing interest risk policy and formulate a new one, if necessary. The interest risk policy may be either self-standing or part of an overall risk and/or finance policy.

A customised financing concept should be aligned with the company’s planned strategic development and meet the needs of daily business operations. When designing financing concepts, we bear the key factors in mind: cost of capital, flexibility, stability and security. This ensures that your finances and capital structure, in particular, will be optimally aligned with your company’s specific situation and that operating and financial leverage will be properly coordinated.

To obtain valuable information for corporate management, the process of formulating the strategy and budgeting must be closely linked with operationalisation of the interest risk using target values.
Moreover, the ways in which the different types of interest risks exercise an influence should be centrally analysed in detail. We assess the possible effects of market changes on equity and financial performance, while systematically distinguishing between the “Accounting View” and “Market View”. On that basis, we derive recommendations for the use of hedge instruments for interest risk management.

The liquidity policy establishes the principles of dealing with liquidity risks and defines the processes, responsibilities and limits of liquidity risk management. Our specialists can assist with evaluating your existing liquidity policy and formulate a new one, if necessary. The liquidity policy may be either self-standing or part of an overall risk and/or finance policy.

We help our customers measure the liquid assets that they need to cover their liquidity requirements in the course of ordinary business and to maintain strategic flexibility. Rolling liquidity planning makes it possible to determine how long the existing liquid assets will cover the operational liquidity requirements. This will give you the necessary basis for taking early measures to prevent liquidity squeezes or excess liquidity.

Liquidity risk management is usually handled by a central organisational unit that is responsible for setting the transfer prices for intragroup fund transfers, among other things. We assist our customers with modelling intragroup transfer prices. The intragroup transfer price policy should reflect the liquidity risks, income and expenses and be linked to market prices.