Global BV news: Accounting for currency risk is ‘all about perspective,’ advises Grabowski

BVWireIssue #158-1
November 4, 2015

It was standing room only in the session conducted by Roger Grabowski (Duff & Phelps) on International Cost of Capital at the ASA’s Advanced Business Valuation conference in Las Vegas. He was his usual erudite self, but was also especially passionate about “our job as valuators doing international work.” He spoke with clear instructions to the valuation community, saying: “Stop thinking in terms of U.S.-centricity; instead ask ‘Who is the investor and what is his or her perspective?’”

Common flaw: Grabowski provided fascinating insight into the major—and very common—flaw of using currency spot rates without projecting for currency risk in the process of corporate budgeting and the erroneous conclusions that follow those calculations. He cited one source that Duff & Phelps uses for currency forecast data: Consensus Economics. Other sources are Economist Intelligence Unit (EIU), IHS Global Insight, and Bloomberg Consensus.

He also encouraged everyone in the audience to send feedback on D&P’s International Valuation Handbook – Guide to Cost of Capital in the spirit of “improving the publication every year.” Email him at  

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