In fact, it’s frequently the only earnings line without Sarbanes-Oxley controls a decade after that law passed and two decades after the COSO framework was released. The FX Gain/Loss line on financial statements is poorly understood by most finance and accounting professionals.
Explanations of these metrics, however, are often interrupted by pointed questions from senior management: “What happened in foreign exchange? And what the heck caused that FX loss?” An executive with these questions usually has to wait for the answers. When financial statements hit the C-suite, they’re often accompanied by detailed analyses explaining what impacted cost of sales, what caused any revenue shortfalls, and why operating expenses exceeded budgets.
