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In this session we shall have look at the most common methods by which firms conduct international business, and what this implies for the financial management of a multinational company. We shall also explore how international trade and investment influences the balance of payments of countries at the macro level.

Countries use different currencies, this means that companies need to conduct trade and investments using in different currencies. This need has resulted in the development of international foreign exchange, money, credit, bond and stock markets. In this session we are going to analyse the specificities of each of these markets.

Exchange rates are continuously changing. In this session it will be explained how exchange rates are measured, equilibrium is determined, and how currency derivatives are used to hedge on the basis of expected exchange rate movements.

The basics of general accounting are reviewed in this session. A link will also be established with the international management of long-term and short-term assets and liabilities.

First we shall have a look at what drives the development of accounting practices in different countries. Accounting objectives may also differ from country to country. The main challenge is to reconcile all these diverse sources and formats of accounting data. We shall see how this can be done and what processes this supposes.

An increasing convergence towards shared international accounting standards and practices is noticeable. We shall examine what are the forces driving this convergence and the different standards used. We shall also examine the potential limits to this convergence.

International business necessarily implies the use of foreign currencies. This in turn requires the recording of transactions in multiple currencies and the translation or consolidation of statements. In this part of the module we shall look the translation process and two methods, the current rate method and the temporal method.

In this session we shall investigate the practical consequences and difficulties of the translation. Some concrete examples will be discussed, and the current rate and the temporal methods will be compared.

The cost of operations and the revenue received from operations are affected by exchange rate movements. Therefore, a forecasted change in exchange rates can affect the feasibility of its planned projects and might influence its managerial decisions. Based on exchange rate exposure measurement and forecasts finance managers can then take measures to mitigate the impact of the exchange rate risk on their company.

Companies engaged in international business are confronted to transaction, economic and translation exposure. Hedging usually is the best precaution, but we shall see that this risk mitigation technique also has its limits.

In this session we shall analyse a couple of examples of hedging and how it can be applied for both long and short-term risk mitigation.

Multinational companies have to continually evaluate the risk of the countries they are active in or plan to develop business. This risk has two main facets, the political risk and the financial risk. Multinational firms have the option to raise long-term funding both domestically and internationally. We shall see how a trade-off between these options can be made.

Innovative technologies have an increasing impact on the international financial system as a whole. This session will focus on two domains in which these developments are already having a significant impact: capital raising (taking crowdfunding as an example), and the international payments system. We shall discuss the development of CBDCs could have on the international finance management of corporations.

The application of blockchain technology was initially limited to it's application in the realm of payments. This is now rapidly expanding to other areas of business activity through the use of smart contracts and NFTs. We shall examine how these new tools will affect the international finance management of corporations in areas such as treasury management, insurance and capital raising through ICOs or STOs.

This exam comprises a mix of 10 practical exercises and short answers questions covering the whole module.