International Accounting Assignment Example | Topics and Well Written Essays - 750 words - 1

International Accounting - Assignment Example In the US, UK GAAPs and others around the world R & D costs have been considered as expenses. According to Gornik and Miguel (2005), the FAS 2 issued in 1974 by the FASB set out that all R & D costs such as costs of material, equipments and facilities together with purchases made on intangibles with no optional future uses, remuneration to the involved workforce, contract services, considerable indirect costs except for general and administration costs to be charged to expenses. The FASB opposed the capitalization of such, as it was before that year, based on factors such as the unpredictability of future benefits from R & D and lack of a clear relationship between what is spent and the gains obtained thereafter. This standard was challenged by the IASB resulting to the formulation of IFRS 3 and IAS 38 in December 2002 and their revision in March 2004. According to these standards all expenses incurred in research work on an internal project will be considered as an expense and any intangible asset arising from it will not be recognized. However those intangible assets arising from development or its phase in an internal project will be recognized if it meets the following criteria. It should be identifiable, the business entity should have control over it, should demonstrate the possibility of bringing in economic benefits and its cost should be measurable reliably. In addition to this, the business entity should demonstrate technical feasibility, clear intention of completion, use and sale of the asset, ability to use and sell the asset, generate probable future benefits and reliably measure the expenditure to be incurred on the asset and finally availability of enough resources required t o complete the development (Linden and Spek n.d.). It is only after meeting these criteria that the internal development expenditure shall be recognized as an asset and only that incurred after

The History Of Characteristics Of Monopolistic Competition Economics Essay

The History Of Characteristics Of Monopolistic Competition Economics Essay 1.0Introduction According to the Dominick Salvatore (2009 p.3) microeconomic theory is perhaps the most important course in all economics and business programs. With it we can answer or understand such question as why the price of gold rose sharply in few years; why the price of petrol rose dramatically in 2008s-2010s and declined in 2011s; why the price of sugar rose in few years; why the cereal rose in few years and others. By contrast, microeconomics is the study of individual house household or firms (business units). It focuses on particular parts of the economy. Microeconomics theory provides the tools for understanding how the other economies operate. 2.0 Introduction to Monopoly According to the Cambridge dictionary (second edition) monopoly in microeconomics mean is when a company or organization is the only one in an area of business or activity and has complete control of it. In market structure under the monopoly there is a single seller and large of buyers and selling products. It have no a high entry and the existence of barrier and have no close substitution to other vendors to enter into the market. Examples of products in monopoly market in our country are water, electricity and local telephone services. Our home telephone services are Telekom Malaysia (TM Berhad). Obviously, Telekom Malaysia is a monopoly in market. Through this it can let us know the meaning and reason causing monopoly. Besides that, it also know characteristic of monopoly and how affect or effect in market structure. 3.0 Characteristics of Monopoly 3.1.1 Single Firm Under the monopoly single seller is that the monopoly seller is the market. The market demand for a good is the demand for the output produced by the monopoly. 3.1.2 Barriers to Entry Barriers to entry is anything are designed which artificially to block or prevent the entry of firms entering a market profitably. There are some of the key barriers to entry are patents and copyrights, limit pricing, advertising, international trade restrictions and development expenditure. 3.1.3 Price Maker Single firm produces goods and have a monopoly in an entire market that means it holds a large majority of a stock. With having a large majority of a stock and a single firm makes a decision affect the price of an item in market. As a result, seller has full control over the market price. 3.1.4 Unique Product Single firm produces unique the product and no close substitutes for the product with each other. For example, there is presently no close substitute for Berita Harian, the only Malay language newspaper in Singapore. 4.0 Hypothetical Demand, Total Revenue, and Marginal Revenue Faced by a Monopolist Table 4.1 Hypothetical Demand, Total Revenue, and Marginal Revenue Faced by a Monopolist Figure 4.1 Hypothetical Demand and Marginal Revenue Curves of a Monopolist Since D is a negatively sloped, MR is lower than P. The MR values are plotted at the midpoint of each quantity interval. The MR curve starts at the same point as the D curve and at every point bisect the distance between D and the vertical axis. MR is positive when D is elastic. MR=0 when D is unitary elastic and TR is a maximum. MR is negative when D is inelastic. Table 4.2 Short-Run Total Cost, Marginal Cost, and Average Total Cost FIGURE 4.2 Short-Run Equilibrium of the Monopolist: Marginal Approach The best or optimum level of output of the monopolist is three units. This is given by point G, where MR=MC (and the MC curve intersects the MR curve from below). At Q=3, P=$6 (point A on the demand curve), ATC=$4.50 (point B on the ATC curve), and the monopolist earns $1.50 (AB) per unit of output sold and $4.50in total (shaded area ABCF). At Q MC and total profits rise by increasing Q. At Q>3, MC>MR and total profits rise by reducing Q. 5.0 Summary Characteristics of Monopoly are single firm, Barriers to entry high, unique product, power of firm over price and advertising. Single firm earns more profits in this type of market structure because no close substitute product to replace it. Barrier to entry is high because want to protect the single firm in market. A firm produces the unique products to avoid others firms to produce it. Monopolist has power to control prices of the product. Last, it consists of advertising in this type of market structure. 6.0 Introduction There are many types of market structures characteristics in which will affect the price and nature competition. For example, number of buyers and sellers, product differentiation, and the ease of entry into and exit from the market. Market structures refer to the competitive environment within which a firm operates. Market structures divided into four basic types which is perfect competition, monopolistic competition, oligopoly and monopoly. 7.0 Perfect Competition Perfect competition is a type of market in which there are large number of buyers and sellers. The sellers sell identical or homogeneous products. There is also free entry and exists of the firms. Both the sellers and buyers have perfect knowledge of the market. 7.1 Characteristics of Perfect Competition 7.1.1 There are many buyers and sellers of a commodity Reynolds, R. L., (2005, p.2) points out that the idealized perfect competitive insures that no buyers and sellers has any power or ability to influence the price. The perfect competitive market is price takers. Each buyer buys the commodity at the price determined by the market condition. 7.1.2 Homogeneous product The product of an industry in which the outputs of different firms are indistinguishable compare with another product. The homogeneous products are the product where the buyers could not differentiate the products of one seller to another seller. 7.1.3 Perfect knowledge In perfect competition firms, consumers and resource owners have perfect knowledge of all relevant prices and costs in market. No buyers to pay more a price of the product higher than the prevailing price. Similarly, sellers will not set or charge a price higher or lower than the prevailing price. Advertisement has no scope in this type of market. 7.1.4 Resources are perfect mobility This means that inputs or resources are free to move in market. Firms can enter or leave the industry in the long run without much difficultly. That is, there are no artificial barriers like copy rights and trademark or natural barriers such as huge capital requirements to entry into and exit from the industry. 7.2 Monopolistic Competition In monopolistic competitions there are contains many sellers but the products are differentiated. Many sellers produce products are similar but not identical. There are following features of monopolistic competition. 7.3 Characteristics of Monopolistic competition 7.3.1 Differentiated products Differentiated products are products that are similar but not identical and the products are close substitutes products with each other. Sellers cannot set their prices of the products very different from each other. In physical differentiation is through differences in design, material, color and others. Further differentiation of a particular product may be based entirely on some seller location of his shop, kind of service they provide and fair dealing. 7.3.2 Large number of firms Under monopolistic competition there is contains a big number of firms satisfying the market demand of the product. These firms do not produce perfect substitutes but the products which are relatively close substitute for each other. For instance, in soft drink industry, the prices for a can of 330 ml soft drink range among several brands on market today such as Pepsi, Sarsi and Cola-cola 7.3.3 No barriers to entry and exit Firms can also and leave a monopolistically competitive industry. The monopolistic element arises from product differentiation. For example, if à ¢Ã¢â€š ¬Ã‹Å"MASà ¢Ã¢â€š ¬Ã¢â€ž ¢ wants to become a company top 10 in international airline system, this firm must find some difference in term of quality of service or facility equipment are provided by the firm. 7.4 Oligopoly According to the Dominick Salvatore 5-edition Principles of Microeconomics (2009, p.330) oligopoly is the form of market organization in which there are few firms of a homogeneous or differentiated product. 3.5 Characteristics of Oligopoly 3.5.1 Few numbers of large firms The firms are few but the size of firms is large. Few firms control overall the market to ensure few number of large firms have a fair amount of market. For example of the oligopoly is Proton and Perodua. 3.5.2 Interdependence Each firm under the oligopoly is can affect the market, making each firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s choices dependent on the choices of the other firms. So, they are interdependence. 3.5.3 Barriers to entry Oligopoly is meaning only few firms in the industry with barriers to the entry of new firms. Firms recognize their mutual dependence. 3.5.4 Advertising and selling costs The firms want to increase a greater share in the market and to maximize sale. So, this firm will expend more money on advertisement and other sale promotion. Advertising and selling cost are playing an important role in this type of market structure. 3.5.1 Homogeneous and differentiate products 3.5.2 Homogeneous Product Oligopoly . In market, industries produce intermediate products and sent to other different industries for manufacturing their products. For examples of the homogeneous products are steel and aluminum industries. 3.6.2 Differentiate Product Oligopoly Products manufactured in these markets are for personal consumption. For example of the differentiate product oligopoly is beer, breakfast cereals, detergents, soaps, computers and others. 3.7 Monopoly Monopoly is a single seller and sell the product is unique. Thus, in market structure there are many buyers and selling the product and there are no close substitutes with each other. For example that gave by Dominick Salvatore (2009, p.287) The Aluminum Company of America (Alcoa) is a classic example of how a monopoly was created and maintained for almost 50 years. The monopoly was created in the late nineteenth century when Alcoa acquired a patent on the method to remove oxygen from bauxite to obtain aluminum. 3.8 Characteristics of Monopoly 3.8.1 Singer seller in the market There are no close substitutes of the product in the market and no more other competitors in the market. Monopolist can control or affect price is evidence of its monopoly power. 3.8.2 Lack of competition Under the monopoly in market structure there are lacks of competition because there are no close substitute products in market. 4.0 Summary The characteristic of market which is classified as one of four market models are perfect competition, monopolistic competition, oligopoly and monopoly. Perfect competition consists of many sellers and buyers of a commodity, homogeneous products, perfect knowledge, and resources are perfect mobility and no ability to control over the price of a product. Monopolistic competition is involved a large number of firms, differentiated products, no barriers to entry and exit and using advertising to shift demand. Oligopoly which is consist a few number of large firms, interdependence, barriers to entry, advertising and selling costs and homogeneous and differentiate products. Last, monopoly includes of singer seller, lack of competition, unique product and imperfect knowledge. In question 2 the various characteristics between the four types of market structures which are Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly have been discussed. These four types of market structure are different characteristics and it will affect the nature or artificial of competition and the price of the product. The figure 6 is shows about the differentiation of the characteristics of the following market structure. Market structure Perfect competition Monopolistic competition Oligopoly Monopoly Number of producers Many Many Few One Type of product Standardized Differentiated Standardized or differentiated Unique product Power of firm over price None Some Some Considerable Barriers to entry Low Low High Very high Non-price competition None Advertising and product differentiation Advertising and product differentiation Advertising Examples Parts of agriculture are reasonable close Pepsi Computer, oil Telekom

George Lucas :: essays research papers

George Lucas THX 1138, American Graffiti, Star Wars, The Empire Strikes Back†¦the list goes on and on. Although many have not heard of each of these films, everyone certainly has to know the man behind them. George Lucas has, in many cases, written, produced, and directed, not to mention edit, his own films. His vision was the driving force that imagined and created these movies. All have made back the cost of the film and most have received millions of dollars in profit.   Ã‚  Ã‚  Ã‚  Ã‚  Although it sounds as if he had an easy life, in reality, Lucas had to struggle in order to get ahead. Not being interested or involved in school, Lucas turned his attention to cars. When he reached driving age, his father gave him a nice, small, â€Å"safe† car. However, passionate about cars and racing, Lucas revved up his engine and turned it into a hot rod. Each day following, he went cruising around town, drag racing often. However, this passion led him to a drastic change in his life. It ultimately led him to success.   Ã‚  Ã‚  Ã‚  Ã‚  Lucas was in a car crash in 1962, which ended his racing career before it even started. He missed his graduation ceremony at his high school, but joked that the only reason he got a diploma was because his teachers felt sorry for him. As a result, Lucas looked for other options to fill his void in life. Since his grades were not good enough for a four-year college, he decided to go to junior college. For the first time in his life, he hit the books. He fell asleep trying to earn the highest grades he could in order to have a future for himself.   Ã‚  Ã‚  Ã‚  Ã‚  During junior college, Lucas formed other interests. Instead of racing, he filmed them on an 8-millimeter camera his father gave him. An old friend, John Plummer, told George that he should apply to the University of Southern California. His friend remarked that it was not that hard to get into as reputation indicated. Lucas applied, and was accepted, for his junior year.   Ã‚  Ã‚  Ã‚  Ã‚  Although the idea was unpopular with his father, Lucas was not stopped in pursing his career. At school, he realized that he had to work his but off to stay on top. He did not mind the hard work. Lucas actually felt relaxed staying up all night editing film. Even when a lot of college students got high on drugs, â€Å"Lucas got high on films (1, 45).

Nucor Case

NUCOR MEMORANDUM To: F. Kenneth Iverson and Management Team of Nucor Corporation CC: AGSM Faculty Teams Subject: Investment Decision Date: 04/22/2009 From: 1713898 The Situation In 1986, flat sheet segment contained 52% of US total steel market1. Nucor Corporation, which is a steel minimill well-known for its leadership, efficient operation and well-structured compensation, is showing the interest in the flat sheet segment. At the same time, there are many new thin-slab casting technologies to help minimills enter the new market quickly and cost-efficiently. One of them is from German firm, SMS Schloemann-Siemag, who has consistently introduced its unique technology, Compact Strip Production (CSP), to Nucor. As the chairman and chief executive officer (CEO) of Nucor, F. Kenneth Iverson has to make a decision on whether Nucor should go for CSP plant developed by SMS. The Issue The most salient issue than concerns Nucor and its management team right now is – What is the best strategy for Nucor to target the flat sheet segment? Alternatives 1. Go for CSP plant: Obviously, the most important reason for Nucor to buy CSP technology is that Nucor could take advantage of the huge opportunity of entering flat-sheet market. As the pioneer of CSP application, Nucor would have 2 to 3 years head start to utilize its technology advantage in order to secure a desired market share. Consequently, CSP will help Nucor to achieve its long-term vision: to target the high end of flat-sheet market. The competition of the low end of flatsheet market is increasing due to the interest of many minimills and the low price products of overseas competitors. Aiming at the high end segment is a wise strategy because the high end segment is expected to bring more profits and help Nucor to grow consistently in future. 1 Exhibit 2 – Steel Mill Product Segments: 1986, page 15 of the case 1 However, going for CSP plant option exposes many disadvantages as well. First of all, without expertise in flat-sheet products, Nucor will be not in a good position to compete fairly to expert players. Subsequently, Nucor will face difficulties in new plant operation and possibly be outpaced by integrated mills adopting CSP. Secondly, the resource constraints will not favor CSP. Sharing resources between CSP and the joint venture with Yamato Kogyo might bring in a risk of not enough capital or even worse, bankruptcy. Last but not least, uncertainty of technology is another major concern. The possibility of new plant’s obsoleteness is there and Nucor clearly does not want to pay a huge sunk cost just because it is the pioneer. 2. Not to go for CSP plant: By not going for CSP, Nucor can apply wait-and-see strategy. It allows Nucor more time to watchfully define the target market and wait for a matured and proven thin-slab casting technology. By that, Nucor will be able to avoid a huge sunk cost. Next, Nucor could utilize the resource on the joint venture with Yamato Kogyo. Hence, the risk of capital shortness will be eliminated. In the other hand, Nucor will let go a significant opportunity to capture some shares of flat-sheet market. It might not affect Nucor in short-term. However, in the long-term, assuming many steel producers adopting successfully CSP or other thin-slab casting technologies, Nucor will be pushed to a bad position to compete over. Also, it will take even more time and resource for Nucor to catch up. Recommendation The first alternative is strongly recommended because of the following three reasons. First, even though money is an issue, it is not a big issue for Nucor. With $185 million in cash and short-term securities on hand together with the ability to issue corporate longterm bond2, Nucor is completed able to fund CSP with a strict financial management. Secondly, CSP project is showing a good cashflow even in the case of CSP’s obsoleteness. Assuming that new CSP plant is operating at 100% capacity or 1 million ton per year, Nucor will get hold of 2. 76% of flat sheet market3, which is reasonable. From a simple projection4, new CSP plant is showing a positive cashflow with NPV = $141. 55 mil, IRR = 19%, and payback period = 4. 34 years. Thirdly, the argument that Nucor should not go to flat-sheet market because of its lacking experience is not convincing. Unless Nucor does not want to enter flat-sheet market, the earlier Nucor enter flat-sheet market, the faster it will learn and the better it will sustain in future. Second-last paragraph, page 14 of the case Appendix 3 4 Appendix 4 2 3 2 Appendices 1. SWOT analysis Strengths Leadership Efficient operation Well-structured compensation Culture Weakness Resource constraint No experience in flat sheet product Opportunities Enter flat sheet market Pioneer in thin-slab casting technology Threats Uncertainty about technology Competition, possibly be outpaced by integrated mills adopting CSP . Porter five forces analysis5 The threat of substitute products – buyer propensity to substitute – relative price performance of substitutes – buyer switching costs – perceived level of product differentiation The threat of the entry of new competitors – Existence of barriers to entry (patents, right, etc. ) – economies of product differences – brand equi ty – switching cost or sunk cost – capital requirements – access to distribution – absolute cost advantages – learning curve advantages – expected retaliation by incumbents – government policies The intensity of competitive rivalry 5 MEDIUM MEDIUM HIGH HIGH LOW MEDIUM HIGH HIGH HIGH LOW MEDIUM LOW MEDIUM HIGH MODERATELY HIGH LOW LOW http://en. wikipedia. org/wiki/Porter_5_forces_analysis 3 numbers of competitors rate of industry growth intermittent industry overcapacity exit barriers diversity of competitors informational complexity and asymmetry – fixed cost allocation per value added – level of advertising expense – Economies of scale – sustainable competitive advantage through improvisation The bargaining power of customers – buyer concentration to firm concentration ratio – degree of dependency upon existing channels of istribution – bargaining leverage – buyer volume – buyer switching costs relative to firm switching costs – buyer information availability – ability to backward integrate – availability of existing substitute products – buyer price sensitivity – differential advantage (uniqueness) of industry prod ucts – RFM (Regency + Frequency + Monetary Value) analysis The bargaining power of suppliers – supplier switching costs relative to firm switching costs – degree of differentiation of inputs – presence of substitute inputs – supplier concentration to firm concentration ratio – employee solidarity (e. . labor unions) – threat of forward integration by suppliers relative to the threat of backward integration by firms – cost of inputs relative to selling price of the product – MEDIUM MEDIUM – HIGH MEDIUM LOW HIGH HIGH HIGH HIGH MEDIUM HIGH LOW MEDIUM MEDIUM MEDIUM MEDIUM LOW MEDIUM LOW LOW MEDIUM MEDIUM HIGH HIGH MEDIUM MEDIUM MEDIUM HIGH MEDIUM – MEDIUM 4 3. Estimation of market share of a full capacity CSP plant Total flat sheet segment 36. 6 CSP full capacity 17 Market share of Nucor's CSP plant with 100% capacity 2. 76% Unit: millions of ton 4. CSP plant’s cash flow with assumption: discount rate = 10%, constant cashflow Cashflow per year Total Cost per ton8 8 Revenues per ton Profit per ton Shipment (millions of ton)7 Total Profit per year Hot-rolled (HR) 225 306. 5 81. 5 0. 5 40,750,000. 00 Cold-rolled (CR) 283 390. 5 107. 5 0. 35 37,625,000. 00 Both HR & CR 78,375,000. 00 Cashflow in 10-year opportunity window Discount rate Year Cashflow 10% 0 -340 Unit 1 78. 37 2 78. 37 3 78. 37 4 78. 37 5 78. 37 6 78. 37 7 78. 37 8 78. 37 9 78. 37 $ mil 10 78. 37 NPV IRR Payback period 141. 55 19% 4. 34 $ mil year 6 Exhibit 2 – Steel Mill Product Segments: 1986, page 15 of the case Exhibit 12A – Construction Costs for Flat-Rolled Product Plants: 1986, page 22 of the case 8 Exhibit 12B – Comparative Operating Data for Flat-Rolled Product Plants: 1986, page 22 of the case 7 5 Nucor Case NUCOR CASE In this analysis we use the Net present value to consider if Nucor should invest in the new technology called: thin slab minimill. NPV is really useful in order to make this kind of decision because it uses the concept of future cash value to evaluate whether the investment is worth, however the NPV is sometimes difficult to calculate because it is not always easy to estimate future cash flow.Considering the assumption I made in the first part of the spread sheet, the thin slab project doesn’t appear to be a wise investment for Nucor because the future cash flows at the present value are less than the initial cost of the investment. Comparing the NPV of the three different scenarios it is evident that the best option for Iverson is to continue whit the unmodernized process. The first consideration about to undertake the investment is based on particular assumptions about the future, if we change those the result of the decision could also change.Due to the fluctuati on of the market is difficult to make the right assumptions and this is why to calculate the NPV is not easy. For instance if we changed the discount rate and we lower it below the IRR, the resulting NPV will be positive and this case to invest in the new technology could be a profitable decision. We can also change the steel price rate keeping the cost rate constant, if it is increased enough the NPV could result positive, at the same time if we reduce cost rate keeping the price rate constant we can find an equal result.Regarding the real option analysis if Nucor decides to wait it is unlikely that another will decide to make this kind of investment first. The follow strategy could be a wise decision for Nucor, because the NPV is slightly negative so the management could decide to undertake this investment in order to gain experience and subsequently use that experience for other plants so this initial price could generate future opportunities.

Hipster

The word Hipster in the dictionary is described as a person who is Hip, I however think there is much more to the term than that. Hipsters are people who represent certain ideals and stand up for causes significant to them through their fashion. Their fashion allows them to make a statement on a particular issue. They also value independent thinking, politics, and art appreciation. Really, being a Hipster is more than being cool or popular; it is a state of mind.My definition of Hipster would be, someone who is able to stand up to society and defend what they think regardless of he discrimination they may receive as a result of their actions. A Hipster needs to be steadfast in their decisions and be a leader amongst his or her peers; standing up against their adversaries. The first example I have to prove my definition of the ‘Hipster' is their sense of fashion. Fashion statements, which are symbols of subcultural lifestyles that are being discriminated by the higher classes, a re a tool the Hipster utilizes to make his statement known.Their fashion sense consists of them wearing vintage and thrift store merchandise. As a result, their clothing choices are meant for attacking the ulturally-ignorant and mainstream consumers. They also enjoy expressing themselves through their hair styles. The haircuts used by Hipsters are considered edgy and effortlessly cool. These hair styles are a combination of messy shag cuts and asymmetric side-swept bangs; thus, giving these styles the Hipster feel. The combination of attire and hair doe's exhibited by these folks leaves an impression on the viewer.To most of society, Hipsters seem as unintelligent hippies who are looking for trouble. They are the outcasts striving for attention. On the contrary, many Hipsters are well educated and very intelligent. Most Hipsters delve into the Liberal Arts world earning respected degrees in that field of study. Others have been known to earn degrees in mathematics and science. They are independent thinkers that value counter-culture, progressive politics, creativity intelligence, and witty banter. Being well educated also requires certain analytical thinking abilities.These abilities allow them to analyze their political surrounding and understand their rights from that view point. It goes to show that you cannot always Judge a book by its cover and you need to dig deeper to truly pass Judgment on another. As I stated previously, the word Hipster referrers to people who are so called hip or popular. Although, â€Å"hipsterism† is an actual state of mind, Hipsters have different political appeals than most people, but they are equally matched to any actual politics.Looking like a Hipster doesn't mean you are necessarily a Hipster; once again don't Judge a book by its cover. The true meaning of being a Hipster is the ability to understand the cultural, artistic, and political appreciations around the world. Although they like to express their feelings tow ards issues by their fashion, they mainly stick to their rights and stand by their beliefs. Sometimes being a Hipster is a mental state only intertwined with distinct fashion sensibilities.Either way one has to respect the ideology of these people and commend them on their tenacity to conform to traditional beliefs. To conclude, a Hipster is someone who expresses their problems through their clothing and through their actions. They will style and dress themselves to their liking as only a part of the cause they are supporting. Through their actions they are able to speak out for those who cant do it for themselves. They know how to start movements and how to keep them going until they receive the appreciation and ompensation they desire.