When calculating normalized EBITDA for bank covenants or valuation, do you exclude FX gains or losses? Situation: US corporate sells in Mexico and Canada and sales and receivables are denominated in local currency. Receivables are later settled in local currency. But when monthly financial statements are prepared, the non-USD line items are translated and a gain or loss results. The starting point for the conversation is this a non-cash expense and therefore added back to EBITDA. The argument denying the add-back is that the FX exposure exists and its a cost of doing business.
