A

Accounting currency

Accounting currency is the term that defines the currency used by a firm to record all of their transactions and financial statements. Also known as the reporting currency or presentation currency, the accounting currency can be different from the currency in which the company sells its products. In order to simplify their financial statements, businesses […]

Accounts payable

Accounts payable or “payables” is the term used in corporate treasury to refer to a company’s debts that need to be paid to a supplier within a given period. More info International Payments Payments Hub Currency Accounts Accounts payable automation Accounts payable are registered as accounting entries on the company’s balance sheet under the “current liabilities” section […]

Accumulator Forward

An accumulator forward, also known as a share forward accumulator or simply an accumulator, is a financial derivative that obliges the issuer to sell and the investor to buy a specific stock or security at a predefined strike price. As the strike price is normally settled periodically, the investor accumulates holdings in the underlying security […]

Additional Fintech Subsectors

Fintech is the term used to describe a vast array of financial service companies. Numerous sectors are covered by this term, which goes beyond the main fintech categories. These include financial advisory services, such as NestEgg. Fintech is even home to companies that have set themselves major objectives for achieving social change, such as Kifiya, […]

Asian Option

Asian options, also known as average value options, are a type of option contract whose payoff conditions are determined by the average price of the underlying asset during a predefined period. The payoff conditions make Asian options different from European and American options, whose payoff is defined by the value of the underlying asset at […]

Authorised payment institution

The UK Financial Conduct Authority (FCA) defines an authorised payment institution as a person authorised as a payment institution under the Payment Services Regulations and included in the Financial Services register to that effect. The Financial Conduct Authority is the regulator of the more than 50,000 firms offering financial services in the UK, including cross-border […]

Average Rate Options

An average rate option (ARO) is an FX derivative by which the buyer and seller commit to exchange FX options at a predefined strike price under a schedule covering the duration of the contract in exchange for a premium price. During this period, the buyer will purchase the currency on the spot market with a […]

B

Balance sheet hedging

Balance sheet hedging is a hedging program designed to protect FX-denominated assets and liabilities from changes in value due to exchange rate fluctuations. Balance sheet hedging is concerned with a firm’s accounting exposure, as managers desire to eliminate accounting FX gains and losses on their financial statements. Because accounting exposure arises later than economic exposure […]

Base currency

In a currency pair quote, the base currency, also known as the primary currency, is the first currency shown. The second currency shown is referred to as the quote currency. Currencies are quoted in relation to other currencies. For example, in the EUR/USD currency pair, EUR is the first currency shown, and always has a […]

Base currency interest rates

The base currency interest rate in a currency pair is the interest rate set by the central bank that issued the base currency, also known as the transaction currency. In FX markets, currencies are quoted in relation to other currencies and represented in pairs. In the EUR/USD pair, the euro is the base currency, while […]