Wales Stephen B. Salter, University of Cincinnati Lee H. Radebaugh, Brigham Young University
Slides Prepared by: Jennifer Anne Salter
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CHAPTER ONE
GLOBAL BUSINESS: ACCOUNTING AND CONTROL ISSUES
INTRODUCTION
Doing business in the global economy
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business activities Many major companies earn a major portion of income outside their home country, e.g., Procter and Gamble
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Trade continued
World trade has grown:
12000 10000 8000 6000 4000 2000 0 1970 1998
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Trade in $ Billions
- Strategic Alliances
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- FDI continued
constitutes a major portion of capital flows
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- FDI continued
Many countries are recipients of inward
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- Portfolio Investment
What is Portfolio Investment?
or Region
or
Investment portfolio
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Now its on to .
CHOOSING A METHOD OF
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production capacity; Companies may have a comparative advantage in terms of the price or availability of raw materials and labor...
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technology.
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portion of their business in more than one country. Globally, in the 1990s, more than 37,000 MNEs controlled 200,000 affiliates.
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MNEs continued
Some MNEs have annual revenues of more
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MNEs - Bigger than some countries, when comparing annual sales and GDP
200 180 160 140 120 100 80 60 40 20 0
Revenues 1999
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Country/Block
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the firm
Those arising from preparation of external
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There are accounting issues which result from exposure to international accounting: problems with the buyers financial statements language and currency problems differences in terminology differences in types and amount of information differences in procedures leading to final figures.
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receivables?
The value in domestic currency of a foreign currency A/R fluctuates as foreign currency rates change; This affects the balance sheet and income statement.
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Copyright
Copyright 2001 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make backup copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
Gray, Salter & Radebaugh Chapter 1
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