Financial Risk Management at Visteon Corporation
| Case Code: FINA018 Case Length: 13 Pages Period: 2003 Pub Date: 2003 Teaching Note: Not Available |
Price: Rs.300 Organization: Visteon Industry: Automotive Parts Countries: Global Themes: Banking and Financial Management, Microfinance |
Abstract Case Intro 1 Excerpts
Excerpts
Credit Risk
Derivative contracts and accounts receivable exposed Visteon to credit risk. Visteon managed its credit risk by stipulating a minimum credit standing for the counterparty. Visteon also limited credit exposure to any one counterparty, and monitored counterparty credit risks regularly...
Market Risk
Visteon was exposed to market risks due to volatility in foreign exchange rates, interest rates and commodity prices. The company used derivative instruments to hedge expected future cashflows in foreign currencies and firm commitments. Visteon maintained risk management controls to monitor the risks and the related hedging...
Financial Instruments: Accounting & Valuation
The criteria used to determine whether hedge accounting treatment was appropriate were the designation of the hedge to an underlying exposure, reduction of overall risk and correlation between the changes in the value of the derivative instrument and the underlying exposure...
Exhibits
Exhibit I: Visteon: Business Segment Information
Exhibit II: Visteon: Financial Highlights
Exhibit III: Visteon: Statement of Income Data
Exhibit IV: Visteon: Consolidated Statement of Cashflows
Exhibit V: Visteon: Statement of Debt
Exhibit VI: Visteon: Consolidated Statement of Shareholder's Equity
Annexure A: Accounting for Financial Instruments under US GAAP
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