the ABC company bought merchandise from the Frankfurt company in Germany. the abc company agreed to make the payment in german currency (euro). assume that for the payment date the euro increases in value and that abc does not have a hedging agreement (hedgign, forward, etc.). On the payment date, ABC: You will not have to record either profit or loss you will have to pay more than in the original agreement will probably register a profit you will have to pay less in the original agreement