FASB 52: Corporate Response and Related Foreign Exchange Market Effects

As of December 1982 United States multinational corporations have been required to implement FASB No. 52, covering foreign exchange transactions. Although it is still too early to make a formal survey based on statistics, a sample of twenty-seven corporations were contacted to determine how the ruling has affected hedging on foreign exchange transactions. Nearly all companies contacted reported that forwards had declined significantly since implementation of the rule. Available statistics tend to support this finding.