Using Current Technologies as Tools in

Valuing Foreign Currency Contracts

Note: This project was completed on April 15, 1998 prior to the issuance of SFAS 133.

The ever changing trends in technology have allowed the evolution of new forms of media to disclose information. For example, companies now use the Internet as an additional means of getting information to its stakeholders. Utilizing database technologies and the World Wide Web (Web), companies can disclose their financials on the Web so that the public can access them. A company could also add a search engine to its web site, allowing interested Web viewers to search the company's database for specific information. One use of such search engine capabilities is illustrated in the situation where an investor wants to find out the most up-to-date value of currency exchange risk that a company is taking. Since a company is not required to publicly disclose updated information in between filing dates, it is almost impossible for an interestsed investor to get the current value of exchange risk without requesting information directly from the company. Using a foreign currency exchange as an example, the use of current web technologies will be illustrated as a valuable tool to investors.