The effect of risk on the value of lost international business profits

Abstract

The primary goal for providing damages for loss of business profits to a plaintiff, is to make the plaintiff whole with regards to monetary losses suffered. When the loss of profits results from international operations, the determination of the loss is more complex than from domestic operations, since political and currency risk need to be considered in addition to business risk. When lost profits occur in the future, these need to be discounted to present value. The discount rate used to discount these profits should be adjusted to acount for the risk associated with these future lost profits.