Category Archive for: Global Business and Accounting

GLOBAL SOURCING

Differences in exchange rates can create significant complexities for firms practicing global sourcing. A recent article in the Los Angeles TImes illustrated the additional problems associated with determining the cost of producing a doll using inputs from several countries. The exhibit below traces the multicountry path of a Barbie” doll from its raw materials source in·a…

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Adjustment of Foreign Receivables and Payables at the Balance Sheet Date We have

seen that fluctuations in exchange rates may cause gains or losses for companies with accounts payable or receivable in foreign currencies. Exchange rates fluctuate on a duily basis. For convenience, however” the company usually waits until the account is paid or collected before recording the related gain or loss. An exception to this convenient practice…

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FOREIGN ‘CURRENCIES AND EXCHANGE RATES

In addition to the environmental characteristics just discussed. companies with international business dealings encounter problems-from multiple currencies. Consider, for example. a Japanese company that sells merchandise to a U.S. corporation. The Japanese company will want to be paid in Japanese currency-yen-but the U.S. company’s bank account contains U.S. dollars. Thus one currency must be converted…

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Culture

Think of culture as the mental ll,.1illdsetthat affects the way individuals in a society act and perceive each other’s actions .I U.S. cultural practices have significant effects on the way foreign companies conduct business in the United States. Likewise, certain forms of advertising, methods of acquiring business; and hierarchical organizational structures, which are common practices…

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Environmental Force Shaping Globalization

Companies considering international operations as a means of fulfilling strategic objectives need to undentand how international environmental forces affect the accounting infonnation measured, reported, and created. We consider these environmental forces in four categories: (I) political and legal systems, (2) economic systems, (3) culture, and (4) technology and infrastructure. You should not think of these…

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THE NEXT CEO’S KEY ASSET: A WORN PASSPORT

In 1979, long before China was Gillette Co.’s Michael Halley flew Into Shanghai. Harley, then the Sydney-based head of Asia-Pacific Operational, was on a to make Gillette one of the first Waters companies milch But his search for a joint venture to make razor blades was Increasingly looking We were flying blind,” recalls . China…

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