Response by United States Financial Managers to Financial Accounting Standard No. 8

Marjorie T Stanley and Stanley B Block
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Marjorie T Stanley: Texas Christian University
Stanley B Block: Texas Christian University

Journal of International Business Studies, 1978, vol. 9, issue 2, 89-99

Abstract: This study reports the response of 103 financial managers of United States multinational corporations to the Financial Accounting Standards Board #8 with regard to foreign currency translation. A sizeable majority of financial managers felt that FAS #8 was inferior to their prior translation method and should be modified or eliminated. The article examines reported reasons for these responses.The effect of FAS #8 upon exposure management is examined, with emphasis upon the fact that 23.3% of those respondents indicated that action intended to reduce accounting exposure has the direct effect of increasing economic exposure. Finally, consideration is given to implications of the financial officers expressed that financial analysts do not always assess properly the significance of translation losses and gains; this perception may not be true, in light of efficient markets considerations, but the actions of the corporate treasurers appear to be influenced by it.© 1978 JIBS. Journal of International Business Studies (1978) 9, 89–99

Date: 1978
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