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Teaching and Learning Resources

The Accountant’s Role in the Organization
An Introduction to Cost Terms and Purposes
Cost-Volume-Profit Analysis. Job Costing
Activity-Based Costing and Activity-Based Management
Master Budget and Responsibility Accounting
Flexible Budgets, Variances, and Management Control
Inventory Costing and Capacity Analysis
Determining How Costs Behave
Decision Making and Relevant Information
Pricing Decisions and Cost Management
Strategy, Balanced Scorecard, and Strategic Profitability Analysis
Cost Allocation, Customer-Profitability Analysis, and
Sales-Variance Analysis
Support Department, Common Cost, and Revenue Allocations
Cost Allocation: Joint Products and Byproducts. Process Costing
Spoilage, Rework, and Scrap
Quality, Time, and the Theory of Constraints
Inventory Management, Just-In-Time, and Backflush Costing
Capital Budgeting and Cost Analysis
Management Control Systems, Transfer Pricing, and
Multinational Considerations. Performance Measurement
Compensation, and Multinational Considerations

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Cost Accounting

Rationale

In management accounting, cost accounting establishes budget and actual cost of operations, processes, departments or product and the analysis of variances, profitability or social use of funds. Managers use cost accounting to support decision-making to cut a company's costs and improve profitability. As a form of management accounting, cost accounting need not to follow standards such as GAAP, because its primary use is for internal managers, rather than outside users, and what to compute is instead decided pragmatically.

Costs are measured in units of nominal currency by convention. Cost accounting can be viewed as translating the supply chain (the series of events in the production process that, in concert, result in a product) into financial values.

There are various managerial accounting approaches:

Classical cost elements are:

raw materials
labor
indirect expenses/overhead

See also

Cost Control

The theme of this unit is 'accounting control'. There is an emphasis on learning accounting control techniques relevant to managing a business enterprise efficiently and effectively. There will also be an emphasis on the concepts that underlie the techniques, the actual use of the information the techniques provide, and the implications of using the techniques. Budgeting and standard costing will be introduced as means to control operations. Divisional performance measures and transfer pricing are introduced as means to control divisions.

The role of management accounting in marketing and the effect of advanced production technology on management accounting will also be considered.

Objectives

1. To introduce the concept of control in organisations and accounting controls

2. To introduce accounting techniques for the control of operations, such as budgeting and standard costing

3. To consider the behavioural implications of using these techniques

4. To introduce the concept of divisionalisation and the techniques available to control divisions, such as divisional perforance measures and transfer pricing

5. To introduce concepts and accounting techniques relevant to marketing and new production technology

6. To introduce the concepts and practices of management information systems

7. To describe and discuss common accounting techniques for cost measurement

Learning Outcomes

Students who successfully complete this unit will have:

1. an understanding of the concept of control and accounting controls

2. the ability to prepare budgets, using excel spreadsheets

3. the abilty to prepare and interpret standard costing variances

4. an understanding of the behavioural implications of using budgets and standard costing

5. an understanding of the issues that arise when firms are divisionalised and the ability to prepare and interpret divisional performance measures, such as ROI and RI

6. an understanding of the role that management accounting data can play in the marketing function

7. an understanding of the basic features and practices in a management information system

Transferable Skills

Skills involving researching information, using the library, condensing information and evaluating arguments and evidence.
Delivering coherent arguments in essay writing.
Analysis of complex business problems
Working in small teams
Report writing skills.
Presentation of report contents to an audience.
IT skills, particularly use of Excel and word-processing.
Problem solving using analytical and quantitative skills.

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Teaching and Learning Resources

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Learning Contents

The Accountant’s Role in the Organization. An Introduction to Cost Terms and Purposes

Tutorials

Readings

What is accounting and who is an accountant?

Accounting can be defined as the process of collecting, recording, presenting & analyzing/interpreting financial information for the users of financial statement.

Accountant can also be describe as a person who has undergone a formal or professional training in the process of accounting & who belongs to at least one of the recognized professional accountancy bodies such as Institute of Chartered Accountants of Nigeria (ICAN), Association of Chartered Accountant (ACA), Institute of Chartered Accountant (ICA) etc.

Accounting systems take economic events and transactions that have occurred and process the data in those transactions into information that is helpful to managers and other users, such as sales representatives & production supervisors.

Accounting systems provide information such as financial statements (the income statement, balance sheet & statement of cash flows) and performance reports (such as the cost of operating a plant or providing a service). Managers use accounting information;

To administer each of the activity or functional areas for which they are responsible and;
To coordinate those activities or functions within the framework of the organization as a whole

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Cost-Volume-Profit Analysis. Job Costing

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Readings

Cost-Volume-profit (CVP), in managerial economics is a form of cost accounting. It is a simplified model, useful for elementary instruction and for short-run decisions.

Cost-volume-profit (CVP) analysis expands the use of information provided by breakeven analysis. A critical part of CVP analysis is the point where total revenues equal total costs (both fixed and variable costs). At this breakeven point (BEP), a company will experience no income or loss. This BEP can be an initial examination that precedes more detailed CVP analysis.

Cost-volume-profit analysis employs the same basic assumptions as in breakeven analysis. The assumptions underlying CVP analysis are:

The behavior of both costs and revenues is linear throughout the relevant range of activity. (This assumption precludes the concept of volume discounts on either purchased materials or sales.) Costs can be classified accurately as either fixed or variable. Changes in activity are the only factors that affect costs. All units produced are sold (there is no ending finished goods inventory). When a company sells more than one type of product, the sales mix (the ratio of each product to total sales) will remain constant.

The components of Cost-Volume-Profit Analysis are:

Level or volume of activity
Unit Selling Prices
Variable cost per unit
Total fixed costs
Sales mix

Cost Volume Profit (CVP) Relationship in Graphic Form

Job Costing involves the calculation of costs involved in a construction "job" or the manufacturing of goods done in discrete batches. These costs are recorded in ledger accounts throughout the life of the job or batch and are then summarized in the final trial balance before the preparing of the job cost or batch manufacturing statement.

Activity-Based Costing and Activity-Based Management. Master Budget and Responsibility Accounting

Tutorials

Readings

Activity-based costing (ABC) is a costing model that identifies activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption by each: it assigns more indirect costs (overhead) into direct costs.

In this way, an organization can precisely estimate the cost of individual products and services so they can identify and eliminate those that are unprofitable and lower the prices of those that are overpriced.

In a business organization, the ABC methodology assigns an organization's resource costs through activities to the products and services provided to its customers. It is generally used as a tool for understanding product and customer cost and profitability. As such, ABC has predominantly been used to support strategic decisions such as pricing, outsourcing, identification and measurement of process improvement initiatives.

External links

Activity-based management (ABM) is a method of identifying and evaluating activities that a business performs using activity-based costing to carry out a value chain analysis or a re-engineering initiative to improve strategic and operational decisions in an organization. Activity-based costing establishes relationships between overhead costs and activities so that overhead costs can be more precisely allocated to products, services, or customer segments. Activity-based management focuses on managing activities to reduce costs and improve customer value.

Kaplan and Cooper (in Kaplan, R. S., & Cooper, R. (1998). Cost and effect: Using integrated cost systems to drive profitability and performance. Boston: Harvard Business School Press.) divide ABM into operational and strategic:

Operational ABM is about “doing things right”, using ABC information to improve efficiency. Those activities which add value to the product can be identified and improved. Activities that don’t add value are the ones that need to be reduced to cut costs without reducing product value.

Strategic ABM is about “doing the right things”, using ABC information to decide which products to develop and which activities to use. This can also be used for customer profitability analysis, identifying which customers are the most profitable and focusing on them more.

A risk with ABM is that some activities have an implicit value, not necessarily reflected in a financial value added to any product. For instance a particularly pleasant workplace can help attract and retain the best staff, but may not be identified as adding value in operational ABM. A customer that represents a loss based on committed activities, but that opens up leads in a new market, may be identified as a low value customer by a strategic ABM process.

Managers should interpret these values and use ABM as a “common, yet neutral, ground … this provides the basis for negotiation” (Kennedy, T., & Bull, R. (2000). The great debate. Management Accounting , 78). ABM can give middle managers an understanding of costs to other teams to help them make decisions that benefit the whole organisation, not just their activities' bottom line.

External links

McGuire, B. L. et al. (1998). Implementing activity-based management in the banking industry Journal of Bank Cost & Management Accounting.

Activity Based Management Advanced Implementation Group http://www.abmaig.org/

Master Budget

The purpose of this chapter is to introduce the master budget or financial plan. This topic includes an important set of concepts and techniques that represent the major planning device for an organization, as well as the foundation for a traditional standard cost performance evaluation and control system.1 The chapter includes seven sections. The first section provides a discussion of the underlying concepts of financial planning and budgeting including the various types of budgets. This section also includes a diagram of the master budget that provides an overview of the overall budgeting process.

Sections two and three include short, but important discussions of the purposes and benefits of budgeting and the limitations and problems involved in budgeting. The assumptions upon which the budget is based are briefly described in section four. Section five introduces the underlying concept of responsibility accounting and provides a brief discussion of a controversial issue associated with this concept. The techniques used to prepare a master budget are discussed and illustrated in section six. This is the longest section and includes a discussion of where the budget director obtains the budget information as well as how the information is used to complete the various schedules and sub-budgets involved.

The last section includes a simplified, but fairly comprehensive example. A somewhat more involved example is provided in Appendix 9-1. Appendix 9-2 provides instructions for using a computer program designed to facilitate the preparation of a master budget.

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Responsibility accounting is an underlying concept of accounting performance measurement systems. The basic idea is that large diversified organizations are difficult, if not impossible to manage as a single segment, thus they must be decentralized or separated into manageable parts.

These parts, or segments are referred to as responsibility centers that include: 1) revenue centers, 2) cost centers, 3) profit centers and 4) investment centers. This approach allows responsibility to be assigned to the segment managers that have the greatest amount of influence over the key elements to be managed. These elements include revenue for a revenue center (a segment that mainly generates revenue with relatively little costs), costs for a cost center (a segment that generates costs, but no revenue), a measure of profitability for a profit center (a segment that generates both revenue and costs) and return on investment (ROI) for an investment center (a segment such as a division of a company where the manager controls the acquisition and utilization of assets, as well as revenue and costs).

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Flexible Budgets, Variances, and Management Control

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Readings

Flexible budgets and the analysis of overhead variances

Standard costing has become so generally accepted as a useful accounting technique in industry that is unusual to find any of its methods called in question. Yet, while the analysis of variances between actual and standard direct costs--direct materials and direct labor--has given rise to no important differences of theory or practice among writers and practitioners, the same cannot be said of the analysis of overhead variances. Indeed, an examination of the literature of the subject over the last thirty years shows an extraordinary variety of treatments.(1) It would surely be in the best interests of management if some agreement could be reached about the most effective method of analysing overhead variances for general application.

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Inventory Costing and Capacity Analysis. Determining How Costs Behave. Decision Making and Relevant Information

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Readings

An inventory valuation allows a company to provide a monetary value for items that make up their inventory. Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements. If inventory is not properly measured, expenses and revenues cannot be properly matched and a company could make poor business decisions.

External links

In business, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In economics, a cost is an alternative that is given up as a result of a decision.[1] In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer. Usually, the price also includes a mark-up for profit over the cost of production.

Costs are often further described based on their timing or their applicability.

See also

External links

Financial information and decision making

The finance department of a company generates a variety of financial information that is helpful in decision making, including: Profit and Loss accounts providing details of whether the business is making efficient use of financial resources.

Balance Sheet information providing details of a businesses assets and liabilities, as well as the liquidity of the business.

Sales and purchases information setting out particular types of trading and accounts with particular customers and suppliers.

Information about the purchase of assets and liabilities.

Information about the wages paid out by a business.

Information about costs.

Pricing Decisions and Cost Management. Strategy, Balanced Scorecard, and Strategic Profitability Analysis. Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Tutorials

Readings

The correct pricing decisions and the factors to consider before making a pricing decision.

This article refers to the various methods of pricing which include the following:

Full Cost Plus pricing;
Variable/Marginal Cost Plus pricing
Rate of Return Pricing;
Break-even Pricing;
Minimum Pricing;
Standard Cost Plus

External links

The balanced scorecard (BSC) is a strategic performance management tool - a semi-standard structured report supported by proven design methods and automation tools that can be used by managers to keep track of the execution of activities by staff within their control and monitor the consequences arising from these actions.[1] It is perhaps the best known of several such frameworks (for example, it is the most widely adopted performance management framework reported in the annual survey of management tools undertaken by Bain & Company, and has been widely adopted in English speaking western countries and Scandinavia in the early 1990s). Since 2000, use of Balanced Scorecard, its derivatives (e.g. performance prism), and other similar tools (e.g. Results Based Management) have become common in the Middle East, Asia and Spanish-speaking countries also.

See also

Digital dashboard, also known as business dashboard, enterprise dashboard or executive dashboard
Data Presentation Architecture
Key performance indicators
Knowledge management
Performance management
Strategic management
Strategy map
Third generation balanced scorecard

References
Sources

Cost allocation is a process of attributing cost to particular cost centres. For example the wage of the driver of the purchasing department can be allocated to the purchasing department cost centre. It is not necessary to share the wage cost over several different cost centers. Cost and services are not identical to each other.

Cost allocation is the assigning of a common cost to several cost objects. For example, a company might allocate or assign the cost of an expensive computer system to the three main areas of the company that use the system. A company with only one electric meter might allocate the electricity bill to several departments in the company.

Allocation implies that the assigning of the cost is somewhat arbitrary. Some people describe the allocation as the spreading of cost, because of the arbitrary nature of the allocation. Efforts have been made over the years to improve the bases for allocation. In manufacturing, the overhead allocations have moved from plant-wide rates to departmental rates, from direct labor hours to machine hours to activity based costing. The goal is to allocate or assign the costs based on the root causes of the common costs instead of merely spreading the costs...

Customer profitability (CP) is the difference between the revenues earned from and the costs associated with the customer relationship in a specified period.

According to Philip Kotler,"a profitable customer is a person, household or a company that overtime, yields a revenue stream that exceeds by an acceptable amount the company's cost stream of attracting, selling and servicing the customer"

In budgeting (or management accounting in general), a variance is the difference between a budgeted, planned or standard amount and the actual amount incurred/sold. Variances can be computed for both costs and revenues.

The concept of variance is intrinsically connected with planned and actual results and effects of the difference between those two on the performance of the entity or company.

External links

Support Department, Common Cost, and Revenue Allocations. Cost Allocation: Joint Products and Byproducts. Process Costing

Tutorials

Readings

Revenue Alloction

Why it's important
Most UK railway tickets involve allocations to more than one operator, including buses, underground and light rail. Changes, even small, in these allocations can significantly change revenue.

By-product costing and joint product costing are used in situations where multiple saleable products are created as part of a production process, and there are no demonstrably clear-cut costs beyond those incurred for the main production process.

Both by-product costing and joint product costing require that you first determine the “split off” point, which is the last point in the production process where you still cannot determine the final product. For example, a batch of sugar, water, and corn syrup can be converted into any of a number of hard candy products, up until the point where the slurry is shifted to a slicing machine that cuts up the work-in-process into a final and clearly identifiable product. From this point onwards in the production process, we can either have a main product and an incidental side product (known as a “byproduct”), or several major products (which are known as “joint” products). The accounting for these different types of final products is somewhat different.

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Process Costing

Spoilage, Rework, and Scrap. Quality, Time, and the Theory of Constraints

Tutorials

Readings

Accounting for Spoilage in Historical Process Costing

Spoilage, rework, defective units and scrap are defined in Chapter 4. Refer back to those definitions if you need to refresh your memory. This section illustrates how spoilage is accounted for in process costing. Rework and scrap are handled in essentially the same way they are in job order costing. The sections in Chapter 4 that describe the accounting for rework and scrap common to all jobs are also applicable to this chapter.

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Theory of Constraints (TOC) is an overall management philosophy introduced by Dr. Eliyahu M. Goldratt in his 1984 book titled The Goal, that is geared to help organizations continually achieve their goal.[1] The title comes from the contention that any manageable system is limited in achieving more of its goal by a very small number of constraints, and that there is always at least one constraint. The TOC process seeks to identify the constraint and restructure the rest of the organization around it, through the use of the Five Focusing Steps.

An Application Of The Theory Of Constraints

See also

External links

What is TOC? - In a video Dr. Eliyahu M. Goldratt Explains the definition of Theory of Constraints.

An Online Guide To The Theory Of Constraints - Fundamentals, Thinking Process, Production, Projects, Supply Chain,

The Theory of Constraints in Plain English - A simple example of constraint identification.

Theory of Constraints at Scholarpedia, curated by Dr. John Blackstone.

Theory of Constraints - Short Term Capacity Optimization A PowerPoint presentation about the Theory of Constraints and its process.

Inventory Management, Just-In-Time, and Backflush Costing. Capital Budgeting and Cost Analysis

Tutorials

Readings

Inventory means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house let furnished. This remains the prime meaning in British English.[1]

In the USA and Canada the term has developed from a list of goods and materials to the goods and materials themselves, especially those held available in stock by a business; and this has become the primary meaning of the term in North American English, equivalent to the term "stock" in British English. In accounting, inventory or stock is considered an asset.

See also

Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs. Just In Time production method is also called the Toyota Production System. To meet JIT objectives, the process relies on signals or Kanban (看板, Kanban?) between different points in the process, which tell production when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT can improve a manufacturing organization's return on investment, quality, and efficiency.

Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstood.

For instance, its effective application cannot be independent of other key components of a lean manufacturing system or it can "...end up with the opposite of the desired result."[1] In recent years manufacturers have continued to try to hone forecasting methods (such as applying a trailing 13 week average as a better predictor for JIT planning,[2] however some research demonstrates that basing JIT on the presumption of stability is inherently flawed.[3]

See also

Capital budgeting (or investment appraisal) is the planning process used to determine whether a firm's long term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing. It is budget for major capital, or investment, expenditures.[1]

Many formal methods are used in capital budgeting, including the techniques such as

These methods use the incremental cash flows from each potential investment, or project Techniques based on accounting earnings and accounting rules are sometimes used - though economists consider this to be improper - such as the accounting rate of return, and "return on investment." Simplified and hybrid methods are used as well, such as payback period and discounted payback period.

External links and references

Sullivan, arthur; Steven M. Sheffrin (2003). Economics: Principles in action.

Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 375. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDb
CategoryId=&PMDbProgramId=12881&level=4

Capital Budgeting

International Good Practice: Guidance on Project Appraisal Using Discounted Cash Flow,
International Federation of Accountants, June 2008, ISBN 978-1-934779-39-2

Prospective Analysis: Guidelines for Forecasting Financial Statements, Ignacio Velez-Pareja, Joseph Tham , 2008

To Plug or Not to Plug, that is the Question: No Plugs, No Circularity:
A Better Way to Forecast Financial Statements, Ignacio Velez-Pareja, 2008

A Step by Step Guide to Construct a Financial Model Without Plugs and Without Circularity for Valuation Purposes,
Ignacio Velez-Pareja, 2008

Long-Term Financial Statements Forecasting: Reinvesting Retained Earnings, Sergei Cheremushkin, 2008

Management Control Systems, Transfer Pricing, and Multinational Considerations. Performance Measurement, Compensation, and Multinational Considerations

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Readings

A management control systems (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole considering the organizational strategies. Finally, MCS influences the behavior of organizational resources to implement organizational strategies. MCS might be formal or informal. The term ‘management control’ was given of its current connotations by Robert N. Anthony (Otley, 1994). [1]

Management control as an interdisciplinary subject

Robert N. Anthony (2007) defined Management Control is the process by which managers influence other members of the organization to implement the organization’s strategies. Management control systems are tools to aid management for steering an organization toward its strategic objectives and competitive advantage. Management controls are only one of the tools which managers use in implementing desired strategies. However strategies get implemented through management controls, organizational structure, human resources management and culture.[2] Anthony & Young (1999) showed management control system as a black box. The term black box is used to describe an operation whose exact nature cannot be observed. MCS involves the behavior of managers and these behaviors cannot be expressed by equations. Anthony & Young (1999) showed that management accounting has three major subdivisions: full cost accounting, differential accounting and management control or responsibility accounting. [3]

According to Horngren et al. (2005), management control system is an integrated technique for collecting and using information to motivate employee behavior and to evaluate performance. [4]. According to Simons (1995), Management Control Systems are the formal, information-based routines and procedures managers use to maintain or alter patterns in organizational activities [5]

Chenhall (2003) mentioned that the terms management accounting (MA), management accounting systems (MAS), management control systems (MCS), and organizational controls (OC) are sometimes used interchangeably. In this case, MA refers to a collection of practices such as budgeting or product costing. But MAS refers to the systematic use of MA to achieve some goal and MCS is a broader term that encompasses MAS and also includes other controls such as personal or clan controls. Finally OC is sometimes used to refer to controls built into activities and processes such as statistical quality control, just-in-time management.[6]

According to Maciariello et al. (1994), management control is concerned with coordination, resource allocation, motivation, and performance measurement. The practice of management control and the design of management control systems draws upon a number of academic disciplines. Management control involves extensive measurement and it is therefore related to and requires contributions from accounting especially management accounting. Second, it involves resource allocation decisions and is therefore related to and requires contribution from economics especially managerial economics. Third, it involves communication, and motivation which means it is related to and must draw contributions from social psychology especially organizational behavior (see Exhibit#1).[7]

Management control systems use many techniques such as

See also

Transfer pricing refers to the setting, analysis, documentation, and adjustment of charges made between related parties for good, services, or use of property (including intangible property). Transfer prices among components of an enterprise may be used to reflect allocation of resources among such components, or for other purposes. OECD Transfer Pricing Guidelines state, “Transfer prices are significant for both taxpayers and tax administrations because they determine in large part the income and expenses, and therefore taxable profits, of associated enterprises in different tax jurisdictions.”

Many governments have adopted transfer pricing rules that apply in determining or adjusting income taxes of domestic and multinational taxpayers. The OECD has adopted guidelines followed, in whole or in part, by many of its member countries in adopting rules. United States and Canadian rules are similar in many respects to OECD guidelines, with certain points of material difference. A few countries follow rules that are materially different overall.

The rules of nearly all countries permit related parties to set prices in any manner, but permit the tax authorities to adjust those prices where the prices charged are outside an arm's length range. Rules are generally provided for determining what constitutes such arm's length prices, and how any analysis should proceed. Prices actually charged are compared to prices or measures of profitability for unrelated transactions and parties. The rules generally require that market level, functions, risks, and terms of sale of unrelated party transactions or activities be reasonably comparable to such items with respect to the related party transactions or profitability being tested.

Most systems allow use of multiple methods, where appropriate and supported by reliable data, to test related party prices. Among the commonly used methods are comparable uncontrolled prices, cost plus, resale price or markup, and profitability based methods. Many systems differentiate methods of testing goods from those for services or use of property due to inherent differences in business aspects of such broad types of transactions. Some systems provide mechanisms for sharing or allocation of costs of acquiring assets (including intangible assets) among related parties in a manner designed to reduce tax controversy.

Most tax treaties and many tax systems provide mechanisms for resolving disputes among taxpayers and governments in a manner designed to reduce the potential for double taxation. Many systems also permit advance agreement between taxpayers and one or more governments regarding mechanisms for setting related party prices.

Many systems impose penalties where the tax authority has adjusted related party prices. Some tax systems provide that taxpayers may avoid such penalties by preparing documentation in advance regarding prices charged between the taxpayer and related parties. Some systems require that such documentation be prepared in advance in all cases.

External links

Performance measurement is the process whereby an organization establishes the parameters within which programs, investments, and acquisitions are reaching the desired results.[1] This process of measuring performance often requires the use of statistical evidence to determine progress toward specific defined organizational objectives.

See also

External links

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