Look carefully at all operations services such as telecommunications, travel and even professional fees. In rare cases, a company might use financing that requires payment of interest in a foreign currency. A more likely scenario is a leasing arrangement, especially where a foreign vendor has agreed to finance the purchase of equipment. If you maintain a manufacturing facility, or even a sales and service office abroad, your employees are certainly paid in the currency of that country or region. By extension, consider fees or commissions you may pay to independent sales agents.
Foreign shareholders expect dividend payments in their own currency.
In the past, companies have used transfer pricing as a way to reduce taxes. Now authorities in many countries, including Canada and the US, are making companies accountable for their transfer pricing policies. These policies may involve an element of foreign exchange risk, as such changes to existing policies may impact a company's foreign exchange risk. After your potential areas of risk have been identified, your next task is to quantify and assess the magnitude of that risk. An important element of foreign exchange risk is the foreign currency you most frequently exchange.