Term
| What is to communicate the organization's financial position to company managers, investors, banks, and the government? |
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Definition
| The Purpose Of Accounting |
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Term
| What are standards that are developed by the International Accounting Standards Board (IASB) for reporting company financial results and that are followed by over one hundred nations throughout the world? |
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Definition
| International financial reporting standards (IFRS) |
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Term
| What are standards that are developed by the US Financial Accounting Standards Board (FASB) for reporting company financial results and that all US companies or companies operating in the US must follow? |
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Definition
| Generally accepted accounting principles (GAAP) |
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Term
| What is a single financial statement that brings together all the financial statements of a parent company and its subsidiaries? |
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Definition
| Consolidated financial statement |
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Term
| What is using financial instruments to reduce adverse price movements by taking an offsetting position? |
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Definition
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Term
| What is an agreement in which a firm agrees to pay a specific rate at the beginning of the contract for delivery at a future date? |
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Definition
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Term
| What is a method of foreign currency translation in which items in the subsidiaries’ financial statements are translated at the current exchange rate (i.e., the rate on the date when the statements are prepared) into the currency of the parent corporation? |
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Definition
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Term
| What is a method of foreign currency translation that uses exchange rates based on the rate at which the assets and liabilities were originally acquired or incurred? |
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Definition
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Term
| What is the rate at which two parties agree to exchange currency and execute a deal at some specific point in the future, usually 30 days, 60 days, 90 days, or 180 days in the future? |
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Definition
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Term
| What is a company-generated forecast of future spot exchange rates? |
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Definition
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Term
| What is the exchange rate for trades that take place immediately? |
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Definition
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Term
| What are the ways in which a multinational firm’s assets are financed, including short-term borrowing as well as long-term debt and equity? |
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Definition
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Term
| What is seeking capital from foreign sources? |
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Definition
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Term
| What is investing capital in foreign markets? |
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Definition
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Term
| What is raising capital by selling shares of stock? |
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Definition
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Term
| What is the organized trading of securities through exchanges? |
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Definition
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Term
| What are all the stock exchanges worldwide where firms can buy and sell stock for financing an investment? |
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Definition
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Term
| What is raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-on interest at a specific date in the future? |
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Definition
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Term
| What lets the customer (in this case, the subsidiary buying the goods or services) defer payment on the good or services for a specified period of time, typically thirty or ninety days? |
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Definition
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Term
| What is the process of financing long-term outlays such as are used for plant expansion or research and development? |
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Definition
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Term
| What are all finance decisions are performed at headquarters? |
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Definition
| Centralized financial organization structure |
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Term
| What subsidiaries or regions make financing or investment decisions for their region? |
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Definition
| Decentralized financial organization structure |
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Term
| What is Islamic law; in terms of finance, prohibits charging interest on money and other common business activities, including short selling? |
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Definition
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Term
| What is a central location where the cash balances of a parent and its subsidiaries are pooled? |
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Definition
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Term
| What is a technique that companies use to reduce the costs of cross-border payments between 3 or more subsidiaries? |
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Definition
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Term
| What is a loan made between a parent company and its subsidiary through a financial intermediary such as a bank? |
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Definition
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Term
| What is a country that has very advantageous (i.e., low) corporate income taxes? |
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Definition
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Term
| What is the price that one subsidiary (or subunit of the company) charges another subsidiary (or subunit) for a product or service supplied to that subsidiary? |
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Definition
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Term
| What are taxes that are shifted to another person or entity? |
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Definition
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Term
| Do you think Price Pump would have been able to sell its products to international buyers? |
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Definition
| With EXIM they do, without EXIM they would run the risk of foreign buyers not paying them back and making things difficult. |
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Term
| What role did the EXIM bank play for Price Pump? |
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Definition
Export credit insurance in order to expand their business worldwide.
The insurance reduces the risk of nonpayment by a buyer in a foreign country—enough to give the small manufacturer the confidence to sell its product overseas and expand to new markets. |
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Term
| Do you think governmental agencies will become more involved in business matters? Why or why not? |
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Definition
The new normal, in terms of government involvement in business, is one in which government’s hand in strategy and strategy execution will be highly visible and significant.
Part of this governmental activism is a result of the growing scale and reach of global firms. |
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