3 unchanged sentences
We have subsidiaries with operations in China and Australia who conduct business in their local currencies (functional currencies) and are therefore subject to foreign currency exchange rate risk on cash flows related to sales, expenses, financing and investing transactions in currencies other than the U.S.
+Added: Currently, we do not have any open foreign currency forward contracts to hedge this risk.
Additionally, certain intercompany balances between our U.S.
−Removed: and foreign subsidiaries are denominated in U.S.
−Removed: Since this is not the functional currency of our subsidiaries in China and Australia, the changes in these balances are translated in our Consolidated Statements of Income.
−Removed: As a result, we are exposed to foreign exchange risk as it relates to these balances.
+Added: and foreign subsidiaries as well as other financial assets and liabilities are denominated in U.S.
+Added: Since this is not the functional currency of our subsidiaries in China and Australia, the changes in these balances are translated in our Consolidated Statements of Income, resulting in the recognition of a remeasurement gain or loss.
+Added: Starting in 2020, we began entering into monthly foreign currency forward contracts to provide a hedge against currency fluctuations on the U.S.
+Added: dollar denominated assets and liabilities held by our foreign subsidiaries.
+Added: As of December 31, 2020, if the U.S.
+Added: dollar strengthened or weakened 10%, the impact to the unrealized value of our forward contracts would be approximately $0.5 million.
+Added: The gain or loss on the forward contracts would be offset by the gain or loss on the underlying transactions, and therefore, would have no impact on future earnings.
Interest Rate Risk
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.