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Mining Sector Currency Risk Management Strategies: Responses to Foreign Currency Accounting Regulation
journal contribution
posted on 2023-05-16, 10:16 authored by Godfrey, JM, Yee, BThis 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.
History
Publication title
Accounting and Business ResearchVolume
26Pagination
200-214ISSN
0001-4788Department/School
TSBEPublisher
RoutledgePlace of publication
LondonRepository Status
- Restricted