I have come up with another algorithm to remember the effect of currency movement on the parent’s profit/loss depending on whether the company has net monetary assets/liabilities. I have used the following conventions:
- A positive (+) denotes currency appreciation, an asset, and a gain
- A negative (-) denotes currency depreciation, a liability and a loss
- Negative times negative=positive, positive times negative is negative
This one is not difficult to remember, given that most companies usually have a net monetary liability. Still, the logic used is very simple and lightweight so maybe it’s worth remembering the table.
This concept is straigforward for us who are doing business and live with assets and borrowings related to Eur and Eur isn’t still domicile currency. I ran away from borrowings in CHF just in the last minute before its brutal appreciation.
This is not the end of story. This was when Lehman went to bankruptcy. Short term IR on interbank market in my country were extremely high. I negotiated closing 70 % of received loan by once off payment without penalty and under favorable conditions, the rest was converted to Eur.
Anyway, I lost my money on my cyclic stock portoflio (fu…n Greek dry cargo shipping companies). Since then I don’t like the Greeks… 
