FINANCIAL FUNCTION GUIDANCE IN RISK MANAGEMENT
Journal Title: Acta Economica - Year 2005, Vol 3, Issue 3
Abstract
Financial policy represents the guidance for decision-making process about fundamental financial goals in a company. We accomplish it with the financial management. One of financial functions goals is financial risk exposure reduction. That is the main reason why companies must incorporate the risk policy and guidance into financial policy. Financial risk guidance depends on risk profile and organisation’s attitude to risk. In accordance with these basic directions, we establish risk identification and measurement techniques, instruments for risk management and requirements for reporting to concerned parties. We can manage risk with internal methods, on spot financial market or with external instruments, represented with derivative instruments. Resulting from the basic risk management guidance, we establish the accounting guidance. This determines recognition and measurement rules for derivative instruments, which depend on the motive for derivative instrument acquirement. The most common motive for using the derivative instrument is financial risk hedging. We affect the planned cash flow realisation with hedging activities, which affect the realisation of planned profitability and company value.
Authors and Affiliations
Jožko Peterlin, PhD
Keywords
Related Articles
- EP ID EP43579
- DOI -
- Views 236
- Downloads 0
BUYERS PORTFOLIO IN EXPORT AND INTERNATIONAL MANAGEMENT
The paper in front of you develops methodology for monitoring of company’s buyers located on the foreign markets by simultaneous monitoring of marketing and financial parameters – market share, share of buyer in total pr...
COURSE OF LOAN-MODELS OF VARIABLE PRINCIPAL REPAID
In this paper is presented the account of effective loan, i.e. course of loan, for case when loan is amortizated of variable principal repaid. Namely, in the literature are presented only two models of amortization of lo...
THE PENALTIES FOR MONOPOLY BEHAVIOR – CARTELS
Determining penalties for cartels and cartel behaviour is one of thr most important things that antitrust authorites has been engaged in world wide. Just a number of executed processing and fines in the last few years is...
MANAGEMENT AND STRUCTURE OF INFORMATION SYSTEMS
In this paper the key point is on high level of mutual connection between management and information system. To precede from a thesis that information system must be special service by management, authors have shown whic...
The Model of Enterpreneurial Bank
The economy of Republic of Srpska, in other word, of Bosnia and Herzegovina, is one of the most undeveloped in this part of Europe. Economic system has a lot of weaknesses: economic, legislative and social characters. In...