It is the risk that a company's equities, assets, liabilities or income will change in value as a result of exchange rate changes. This occurs when a firm denominates a portion of its equities, assets, liabilities or income in a foreign currency.

Risk of adverse effects on a firm's financial statements that may arise from changes in exchange rates.

The risk of loss from adverse foreign exchange movements that affect sterling values of Balance Sheet items held overseas and past transactions in foreign currency.