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Hi John.
what exactly is the difference between netting and matching?
(I did a google search before asking here, but am still confused).
Thank you.
p.s. the link from the AFM landing page to ‘ask a tutor’ forum is broken.
Netting is using receipts in a foreign currency to make payments in the same currency (and so only needing to exchange the balance remaining).
Matching is where you have annual income in a foreign currency (and so the profit fluctuates as the exchange rate changes) – so you deliberately make one of your expenses in the same foreign currency. As the exchange rate changes, the income and expense both change together which cancels out the effect.
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