Accounting and multinational corporations

Accounting and multinational corporations

Multinational corporations are dedicated to the development of one or more activities in several countries, where they’ll seek to grow their operations, and further expansion of their activities, resulting in an economic growth, given the low costs that allow low prices and an expansion of their market.

Regarding the precise definitions of a multinational, there has been a certain amount of controversy over the different ones that exist. Some define it as any company that maintains economic operations in more than one country, while others argue that this should not be limited to possessing operations outside the borders, but they must also have capital and staff from different countries as well.

Several different types of corporations can be identified. An ethnocentric company is oriented to their nation and its subsidiaries are controlled by the parent company, the accounting system is based upon the practices used in the country of origin, and there is a permanent domain of the head office. A polycentric company implies a decentralization in which the development of the accounting practices of each of its subsidiaries is allowed, and the economic returns are expected by the parent company. In the case of a geocentric company, accounting information systems are accessible to the systems of all countries involved in it. Its design is created based upon the systems of the most developed countries and international standards.

Needs and financing

What needs do these multinational corporations develop and how can they be financed?

Among the needs we can find a quest for homogenization on how to use the resources, personnel and financial information, and, overall, the control of its subsidiaries, creating an organizational environment with efficacy. Another need is to create good relations with the governments of countries in which the subsidiaries of the multinational firm are located, demonstrating the benefits it generates, thus allowing an atmosphere of trust that will facilitate an easy access and distribution of their products.

A multinational firm must comply with various legal areas allowing the development of its activities and creating a degree of confidence in their products and the financial information presented to users, which should be easy to understand since it should be developed based on the normative aspects of their country.

In order to work on these needs, multinationals must have a source of funding that can be a north american source for obtaining funds, an international source of funds, local sources of funds abroad, or other foreign sources of funds.

Accounting development of multinationals and its issues

While the basic techniques of accounting for business transactions are the same regardless of the country in which the business is conducted, problems arise when applying these techniques to foreign operations, which do not exist in domestic operations.

These problems grow out of conditions such as the distance from the parent company, different languages and the resulting barriers to facilitate communications, different laws and legal systems, different stages of progress in the art of applying accounting, different accounting practices, and different types of currency. Let’s take a closer look at each one of these.

  1. Distance from the parent company: this difficulty is presented by the distance between the parent company and its subsidiaries at the time of collection of the information related to the different movements and transactions that will be necessary to prepare financial statements.

In many cases the parent companies attribute the delay in getting the financial statements of foreign subsidiaries to the fact that accountants in some countries do not put much emphasis on periodic reports, as do the accountants in developed countries.

  1. Different languages: local laws and employment of local staff make it necessary to keep accounting records in the national language and the national currency in most countries, without the need to store this information in a different language (the parent or subsidiary’s language), causing problems when it comes to analyzing and interpreting the information presented by different companies.
  1. Foreign laws: Each country has its own laws and administrative agencies that regulate accounting in that country. Due to the approach given to every law in their country of origin, this leads accountants to give a different management to their profession, be it thinking about the welfare of the company, state or partners.
  1. Differences in accepted accounting practices: when a subsidiary conducts its financial statements, these are made according to the laws of each country. When consolidating the information, certain difficulties may arise. When differences are material, subsidiaries adjust their statements to the accepted practices that the parent company follows.
dollars no cents_multinational corporations_shahram shirkhani
Image courtesy of Monica PC at Flickr.com

Some companies require that all of their subsidiaries follow the same methods of accounting, which is why multinational companies have an accounting manual that provides a set of accounts, standard depreciation rates and a number of reporting forms. All of this makes it possible to compare accounting and costs between countries.

  1. How to ensure a competent accounting staff abroad: what is believed to be the most appropriate is to have a responsible accountant in the same country as the subsidiary, but many multinational companies do not agree, and have sent local staff from the parent office to perform these duties in the various subsidiaries they own.

In search of a greater degree of trust and credibility of transactions and movements made by each subsidiary, the parent chooses to apply some of their practices in other countries, sometimes without being aware that this can bring administrative and legal consequences to its subsidiaries. This is why it is best to train foreign personnel to perform their duties according to what the headquarters want, but proportionately to the development of said countries.

  1. Accounting issues due to differences in currency: due to devaluation, in some cases, when the foreign currency is converted to the local one, a company can go from profiting to losing.

What many multinationals sometimes don’t understand is that the profit margins that are satisfactory when measured in local currency, may not be the most appropriate to compensate for the devaluation and thereby maintain working capital and productive capacity.

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What it’s like to work for the best multinational companies

What it’s like to work for the best multinational companies

A Great Place to Work for over 25 years has studied and pinpointed the best workplaces from all over the world. They say that any company can do it, all they need is to invest in building a trusting relationship with all of the organization, where they can see benefits of interested, engages and vibrant employees. At the end of the day the most benefitted will be the organization with more innovative products and satisfying relationships, that will be seen in profits. Trust is the foundation, they say. Trust among co-workers turns into camaraderie and trust from managers will also have benefits with creating safe environments for employees to innovate freely. Through their work they research and survey employees from all over the world, information with which they created a model that could be used in any company that builds upon trust to increase performance. In 2016 after analyzing the top multinational companies, these were the ones that came in on top for employees when surveyed.

No. 5: Quicken Loans

Quicken Loans is America’s second largest mortgage lender, closing businesses across the 50 states in 30 days or less. The employee ratings were 96% when asked if their workplace was a great place to work. They were asked how they felt about their company from a variety of different perspectives, but the ones that were higher than the rest, only by a few percentage points, were a great atmosphere and and great pride. Most employees stated during their interviews that they felt good about how they contributed to the community and how their facilities contributed to a good working environment. The employees at the company also have available to them many different perks and advantages to working there like the “Live Downtown Program” which offer significant housing incentives to live in downtown Detroit like stipend for first time renters or loans for purchasing a new home or home improvements.

No. 4: Wegmans Food Markets, Inc.

Being a family-owned, employee-first, food company, it is known for a fun, family environment where you’ll find caring relationships with co-workers and customers. You’ll feel right at home when you visit them. Their employees feel the same, especially since they feel the company has empowered them and invested in their development. Their sense of pride was what was qualified the highest among their employees. They have perks for employees as well like a Wellness where they have programs which include free blood pressure and health screenings, tobacco cessation, subsidized Weight Watchers, EAP and yoga. Besides this they have scholarship programs, talent pipelines and development programs that offer training and development resources in-house.

Wegmans_shahram shirkhani_multinational companies_
Image courtesy of luluinnyc | Amy Dreher at Flickr.com

No. 3: The Boston Consulting Group, Inc.

The great atmosphere is what employees rate the highest at The Boston Consulting Group, Inc., a management consulting firm which specialize in business strategy and general management. They have at least two-thirds of their clients on the Fortune 500 list, as well as mid-sized companies, non-profit organizations and government agencies. 98% of employees feel they have special and unique benefits at The Boston Consulting Group and their proud to tell everyone they work there. Their perks of having an individualized career and professional development program include extensive training, mentorship, coaching and feedback-based development infrastructure. They also offer On-Demand Virtual Learning and industry-leading benefits package.

No. 2: ACUITY Insurance

96% of employees say that this is a great place to work. Their great atmosphere, rewards and sense of pride are the top qualities that their employees value. ACUITY Insurance is headquartered in Wisconsin and specialized in regional property and casualty insurer. In the last 15 years they have been part of Ward’s 50 Best-Run Companies. They generate $1 billion annual revenue from over 1,000 independent insurance agencies in 24 states. The company has a great work environment where employees feel that they celebrate special events and they feel good about how they contribute to their community. Magic Happens Gossip Line is when feedback is given on a global scale via a massive voicemail message and the employee is given a $100 gift card. They also have the five-year club, some wellness initiatives and generous benefits.

No. 1: Google Inc.

Google employees agree that they feel great pride saying they work there, and love the challenges, atmosphere and rewards they offer. This technology company is making information more and more accessible and specialize in internet-related services and products. The employees say that special and unique benefits at Google are amazing, as well as how employees in general are willing to go the extra mile to get things done. Their Google Reach Volunteer Trips is one of their philanthropic efforts that help communities’ small businesses face development challenges. Talks at Google is a great perk that brings artists, authors, politicians, celebrities and performers all through the year to speak at the Google offices. The goal of these talks is to connect Googlers to the content creators and experts in the different fields. They also made an important move in parental leave when they decided to give primary caregivers up to 12 weeks of fully paid baby bonding time, as well as up to 20 weeks to birth moms. Not to mention, their Dogfooding program where employees can test drive new apps, programs or software and give feedback to the team developers.

The 10 most unusual objects confiscated by airport security officers

The 10 most unusual objects confiscated by airport security officers

The most interesting thing about airports is the variety of people and cultures that you can find inside them. People arriving and departing from and to any country in the world. People with adventures that are just about to start or experiences that have just finished with the landing of the plane they just hopped of. Airports carry all sorts of stories and feelings all day and all night long, 24/7. It is a never-ending activity that has so many things going on, not only people speaking different languages, or practicing different religions but also different ways of dressing and even different types of objects contained in their luggage.  As all passengers normally know, not all objects are allowed through customs. There are many restrictions that most people are aware of, when it comes to travelling with luggage that contain certain items that are just not that common, but instead dangerous, sometimes even creepy and therefore prohibited on airplanes.

Here is a list of unusual, strange and even creepy objects that have been found and confiscated by customs or airport security in different airports around the world. Objects that airport personnel are still not sure why someone would carry in their luggage, or even think about achieving.

A plastic bag with 40 vacuum packed frogs

This is certainly a very odd piece of luggage content. Not only because it involves 40 animals, but also because they are vacuum packed, meaning they are already dead and someone is keeping them well packed for a very special reason. In this case that reason is rather uncertain, but still the idea of having a bag with 40 dead frogs in a suitcase it not exactly what you can call “normal”. There are regulations for the transportation of animals that are alive or dead, in every airline.

A Samurai Sword

The person who tried to get on a plane with a Samurai Sword, was handling this as an antique, not as a weapon, and since a sword is a weapon, it doesn’t matter if it’s an antique or not.

A human skull

A man was carrying a skull in his luggage while he was traveling in Italy. Carrying human parts will definitely get you in trouble at any airport, especially if you don’t have any permission or something that demonstrates the legal permits for handling it.

Dried caterpillars

The border agency officer who found these insects in the luggage of someone who had soldier luggage, was pretty shocked since the only explanation experts could find was that these insects were transported this way with the purpose of doing some kind of harm in terms of food and therefore health.

Snakes hidden in a bra

In Sweden, a woman was arrested in an airport for carrying more than 70 snakes inside her bra. Of course the snakes were not very big, but still, there are restrictions and regulations  if you want to carry animals as luggage, especially is they are alive, and even more important, when the passenger hides them inside their clothes.

A Chameleon

A girl was able to travel with her pet chameleon sitting quietly on her head, under a hat, from the Arab Emirates to the UK.

Poisonous Tarantulas

A person got his luggage confiscated after more than 40 living poisonous tarantulas were found in his luggage. The tarantulas were hidden in their clothes but they were kept in plastic containers adapted to keep them alive during the trip. This is a very dangerous kind of luggage that departed originally from Peru.

Human eyeballs

As crazy as it sounds, a jar filled with human eyeballs and some kind of liquid was found and confiscated by customs in London. This is one of the creepiest items of this list.

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Image courtesy of Fermín R.F. at Flickr.com

Pigeons

Even if it seems kind of impossible, a man landed in Australia with live pigeons inside of his pants. The birds were alive when they were found. They were confiscated  

An Egyptian sarcophagus

This was a very big item found in Miami Airport. It was supposed to travel in a casket so people wouldn’t easily find out what it really was. Egyptian experts that examined the piece, mentioned this piece was probably one of a group of Egyptian treasures that were stolen a century ago.

What are air miles and how do they work?

What are air miles and how do they work?

Travel for free with your everyday purchases and get great benefits being a frequent traveler. We’ll take a look at what an air miles plan is, who can participate and how you can start earning points for your next trip.

What is an air miles plan?

Air miles are a program created by major airlines, which allows travelers to earn points -by miles or kilometers, according to each company’s policies- every time they buy an airline ticket or make a purchase with their credit cards.

The miles or points you accumulate are themselves worth something. Once you’ve accumulated enough miles, you can redeem them for airline tickets and other benefits such as upgrades on your flights, hotel stays, car rentals, among others.

How to participate in an air miles plan?

Each airline has a different plan, but they all agree on one thing: To earn as many miles as possible, you must make purchases with your credit card. The two modalities that exist are:

  1. Directly with the airline: You accumulate miles in a frequent flyer account every time you use the services of the airline. It is the most convenient option for people who travel frequently.
  2. Through the bank: You get points with your credit card every time you make a purchase or payment. Then you can exchange points for miles in the airline associated with the plan. It is the most convenient mode if you are not a frequent traveler.

If you’re not a frequent traveler

After air travel, one of the main sources for miles are credit cards. If you are not a frequent flyer, you can earn miles with your credit card’s loyalty program without becoming a member of the frequent flyer program. Most banks have an agreement with an airline or a group of partner airlines. Almost all airlines have a frequent flyer program.

For this you must make sure that your bank has an agreement with an airline or group of airlines, and that this agreement will be convenient for you.

Each card and airline has a different mile earning system. In addition, even if your bank offers this plan, it is possible that your credit card doesn’t have it activated right away and all you have to do is request it. You can do so through the internet or through the phone, by contacting your bank. If you are not a member of any airline, you will get a frequent flyer account instantly so you can earn miles every time you make a purchase with your credit card. The amount of miles is calculated differently depending on each bank.

You can earn miles with your everyday expenses, each time you make a purchase or pay for a service. Credit cards are one of the most practical and useful ways to accumulate miles in the frequent flyer programs of airlines, because you can do it without even getting on a plane while taking advantage of the payments you make in your everyday life.

We also recommend you to keep an eye on the special promotions that often vary according to the partnership the bank has with the company at any given time. Some banks only provide such benefits to their select clients.

Tips to earn miles with your credit card

  1. Before acquiring a credit card, find out what are the current promotions regarding air miles plans, and how long do those promotions last.
  2. Check if they award points with any type of purchase or if there are any restrictions. And if you have multiple credit cards, make sure to do most of your purchases with the credit card associated with your miles plan.
  3. Check the expiry date of your miles. The accumulated miles will expire after certain period of time if your account is inactive. Don’t forget to read the terms and conditions of your miles plan.

If you are a frequent traveler

If you are a frequent traveler, you’ll be able to take advantage of all those hours of flight, and you’ll earn miles with each purchase of airline tickets. Within frequent flyer plans, you can also earn miles with the purchase of goods and services in any of the companies associated with your airline, by staying in certain hotels or renting cars in certain companies.

But for this to work, you must first become a member of a frequent flyer program of any airline. Most airlines have a frequent flyer program. Choosing the best program depends on each person and their customs when traveling. However, it is advisable to choose an airline that, from your place of residence, offers flights to a wide variety of destinations. Please note that miles can not be transferred from one frequent flyer program to another, so to earn miles it’s important to always travel with the same airline or group of partner airlines, in order to centralize in a single account all of the miles you earn.

You can sign up by entering the website of your preferred airline. Most frequent flyer programs allow you to register on their websites and the registration is usually free. Remember that enrollment in such programs is per passenger; therefore, if all of your family is traveling, you must register each person separately. There’s no need to be a citizen of the country to which the airline belongs.

Once you have entered your data, you will receive a membership number and password. You are now ready to start accumulating miles!

As a member of a frequent flyer plan, remember that you can earn miles with the expenses that you make with your credit card. Your credit card must have an agreement with the airline or group of airlines of which you are a member.

Iran Air A300-605R_fly_tickets_miles_shahram shirkhani
Image courtesy of Peter Russell at Flickr.com

Redeem your airline miles

Once you’ve accumulated enough miles, you’re ready to redeem them. The main objective of those who accumulate miles is to redeem them for free airline tickets. But the miles can also be used for upgrades or as part of payment of a ticket.

The vast majority of frequent flyer programs also allow you to redeem other products or services such as hotel accommodations, magazine subscriptions, car rentals and all kinds of objects. In this case you should evaluate what is best for you, if you spend your miles on certain products or services or whether it is preferable to continue to keep your miles for future trips.

8 Of The Best United States Air Shows For Aviation Enthusiasts

8 Of The Best United States Air Shows For Aviation Enthusiasts

Airshows are a common ground to see the passion we all have for flying being represented. You don’t even have to be an enthusiast to stand in awe and marvel at the flying skills displayed by pilots and the amazing capabilities showcased by aircrafts that take to the airs and delight spectators. Airshows started drawing hundreds of thousands of attendees since their early beginnings just a few short years after the Wright brothers first took to the skies. Airshows are often held as business and trade events where services, aircrafts or avionics are showed to potential customers, but also as wonderful places for families to gather and behold hits impressive machines. The military often organizes them for the public to participate in charities, promote military enlistment and to raise the profile of the organization. The United States normally enjoys of an air show season running from March to November while other countries may see shorter seasons.

The 2016 season of air shows in North America lists more than 300 events to enjoy all around the country; here we have some of the best ones for you to visit this season.

Florida International Air Show

Late March – Punta Gorda, Florida

Named one of the “10 Best Air Shows Around the World” by USAToday.com, the Florida International Air Show seeks to focus on wholesome family entertainment, educating the public on matters of aviation and showing special performances of civilian and military aircrafts alike. The organization is a Florida “not for profit” corporation, so all income from gate receipts, sponsors and other events goes to putting on the Air Show every year.
http://floridaairshow.com/

Sun ‘n Fun International Fly-In and Expo

End of March or April – Lakeland, Florida

Every year since 1974 the skies over Lakeland are filled with planes from around the world, watched by thousands of attendees that have made this show a yearly tradition. This celebration has grown into the second largest event of its kind in the world and is Florida’s largest annual convention. The event offers: jet teams, aerospace related exhibits; educational forums, aircraft static displays, professional gatherings of aviation and economic development groups and of course daily and evening airshows that include amazing aerobatics.
http://www.sun-n-fun.org

Dayton Air Show

June – Dayton, Ohio

The history of this flight exhibition dates back to 1910 and the Wright Company. Being held at Dayton has a great significance amongst enthusiast as this place is the hometown of the Wright Brothers and is where Orville and Wilbur built their first powered plane. Vectren mainly sponsors the show and it is considered to be one of the country’s greatest aviation events.
http://www.daytonairshow.com

MacDill Air Fest

April – Tampa, Central West Florida

One of the largest air shows in the United States, the MacDill Air Fest attracts more than 750,000 enthusiasts every year. The show mostly focuses on the military and the United States Air Force mission.
http://www.macdill.af.mil

Alliance Air Show_aviation_air shows_shahram shirkhani
Image courtesy of Jerry and Pat Donaho at Flickr.com

Reno Air Races

September – Reno, Nevada

Bill Stead organized an air race near Reno, Nevada in 1964, thus giving birth to the Reno National Championship Air Races. This particular event carries on the tradition of the Cleveland Air Races of the 20’s, 30’s and 40’s. The desert north of Reno becomes home to hundreds of aircraft, their pilots and crews for one week every year. In the last decade, the event has attracted more than 150,000 fans of aviation and generated more than $66.5 million every year for the region’s economy.
http://airrace.org/

Joint Base Andrews Air Show

September – Camp Springs, Maryland

Just east of Washington, DC, this air show displays just about every single flying piece of equipment that the US military has in operation, with a few oldies included as well. The Joint Base Andrews Air Show is the culmination of the weeklong activities in the National Capital Region, which includes the Air Force’s Birthday Week celebration in the second week of September.
http://www.andrews.af.mil

Oshkosh EAA AirVenture Show

July – Oshkosh, Wisconsin

For one week each summer, 500,000 of the Experimental Aircraft Association (EAA) members and aviation enthusiasts totaling more than 500,000 coming from more than 60 countries attend EAA AirVenture at Wittman Regional Airport in Oshkosh, Wisconsin. Here they tell stories, remember old friendships and celebrate the past, present, and future in the world of flight. The EAA AirVenture has evolved from a small congregation of aircraft and aviators into a striking, weeklong celebration considered The World’s Greatest Aviation Celebration.
http://www.eaa.org/en/airventure

Miramar Air Show

September, early October – San Diego, California

This air show takes place where the famous Hollywood movie “Top Gun” was filmed. The Miramar Air Show is the largest military air show in the United States and it displays some of the most amazing and modern US arsenal available. Every year, spectators are treated by a performance of the Blue Angels, the United States Navy’s flight demonstration squadron.
http://miramarairshow.com