International finance-the finance function of a multinational firm has two functions-treasury and control. The treasurer is responsible for financial planning analysis, fund acquisition, investment financing, cash management, investment decision and risk management. Controller deals with the functions related to external reporting, tax planning and management, management information system, financial and management accounting, budget planning and control, and accounts receivables etc.

Multinational finance is multidisciplinary in nature. While an understanding of economic theories and principles is necessary to estimate and model financial decisions, financial accounting and management accounting help in decision making in financial management at multinational level.

Because of changing nature of environment at international level, the knowledge of latest changes in forex rates, volatility in capital market, interest rate fluctuations, macro level changes, micro level economic indicators, savings, consumption pattern, interest preference, investment behavior of investors, export and import trends, competition, banking sector performance, inflationary trends, demand and supply conditions etc. is required by the practitioners of international financial management.

Nature of the financial Management


  • IFM is concerned with financial decisions taken in international business.
  • IFM is an extension of corporate finance at international level.
  • IFM set the standard for international tax planning and international accounting
  • IFM includes management of exchange rate risk

Scope of the financial Management:


  • IFM includes working capital management of multinational enterprises.
  • Foreign exchange markets, international accounting, exchange rate risk management etc.
  • It also includes management of finance functions of international business
  • IFM sorts out the issues relating to FDI and foreign portfolio investment
  • It manages various risks such as inflation risk, interest rate risks, credit risk and exchange rate risk.
  • It manages the changes in the foreign exchange market
  • It deals with balance of payments in global transactions of nations.
  • Investment and financing across the nations widen the scope of IFM to international accounting standards.
  • It widens the scope of tax laws and taxation strategy of both parent country and host country.
  • It helps in taking decisions related to international business.