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Mining Sector Currency Risk Management Strategies: Responses to Foreign Currency Accounting Regulation

Citation

Godfrey, JM and Yee, B, Mining Sector Currency Risk Management Strategies: Responses to Foreign Currency Accounting Regulation, Accounting and Business Research, 26, (3) pp. 200-214. ISSN 0001-4788 (1996) [Refereed Article]

Abstract

This study investigates the impact of Approved Accounting Standard ASRB 1012, Foreign Currency Translation, on the currency risk management strategies of firms in the Australian mining industry. ASRB 1012 increased the responsiveness of most mining companies' reported earnings to exchange rate movements, and it was predicted that firms would alter their capital structures in response to the increased accounting exposure. The results suggest that mining companies decreased their proportionate levels of long-term foreign debt and increased their share capital and/or reserves to mitigate the effects of the standard on their contracts. This information is useful to standard-setters seeking an awareness of the potential micro and macro-economic effects of their pronouncements.

Item Details

Item Type:Refereed Article
Research Division:Commerce, Management, Tourism and Services
Research Group:Accounting, Auditing and Accountability
Research Field:Financial Accounting
Objective Division:Expanding Knowledge
Objective Group:Expanding Knowledge
Objective Field:Expanding Knowledge through Studies of Human Society
Author:Godfrey, JM (Professor Jayne Godfrey)
ID Code:8385
Year Published:1996
Deposited By:Accounting and Corporate Governance
Deposited On:1996-08-01
Last Modified:2011-08-19
Downloads:0

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