westfield us valuations down thirty five pcent, page-7

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I would expect any devaluation of Centro's U.S properties to be softened by the fall in the Aussie dollar to the U.S. dollar. The AUD/USD exchange rate has come back from 0.96 to 0.86 in recent times, which is approxmately 10%.

I recall that Centro's functional currency is Aussie dollar and it would be unusual to hedge the forex risk associated with holding U.S. property assets.

Accordingly, I expect any debits to the P&L from a devaluation of U.S. properties to be offset (to some extent) by credits to the P&L from FX transalation gains on U.S. assets.

Just my thoughts. Any comments are welcome (particularly from Financial Accountants).