segmented reporting investment center evaluation and transfer pricing PPT

8/17/2019 segmented reporting investment center evaluation and transfer pricing PPT

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Assalamualaikum wr.wb


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HelloMy name is Fariez Danial


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Hello,my name is ayu dian setyani


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Hello,my name is M. Haris azmi nur alam


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EGMENTED REPORTING , INVE TM

ENT CENTER EVALUATION, AND

TRAN FER PRICING


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DECENTRAL!AT"N ANDRE#$"N#%L T& CENTER#

#E'MENTEDNC"ME

#TATEMENT#

(#N')ARA%LEC"#TN' MEA#(RN'

THE$ERF"RMANCE

"F

N)E#TMENTCENTER#(#N' R"

TRAN#FER$RCN'

MEA#(RN' THE

$ERF"RMANCE "FN)E#TMENTCENTER# (#N'

RE#D(AL NC"MEAND EC"N"MC)AL(E ADDED


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DECENTRALIZATION AND RESPONSIBILITY CENTERS


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DECENTRALIZATION AND CENT

ER OF LIABILITY

In general, a coman! "# organ"$e% along l"ne# o& re#on#"'"l"(!) T*e (ra%"("onal organ"$a("onal c*ar(, +"(* "(# !ram"% #*ae,"ll#(ra(e# (*e l"ne# o& re#on#"'"l"(! &lo+"ng &rom (*e CEO %o+n


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Rea#on# &or Decen(ral"$a("on

Ga(*er"ng an% U#"ng Local In&orma("on

Foc#"ng O& cen(ral managemen(

Tra"n"ng an% mo("-a("ng o& manager#

En*ance% Come("("on


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D"-"#"on# "n (*e Decen(ral"$e% F

"rmDecen(ral"$a("on "# #all! ac*"e-e% '! crea("ng n"(# calle% %"-"#"on#) One +a! "n +*"c* %"-"#"on# are %"&&eren("a(e% "# '! (*e(!e# o& goo%# or #er-"ce# ro%ce%)


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MEASURING T.E PERFORMANCE OFPROFIT CENTERS USING VARIABLE A

ND ABSORPTION INCOME STATEMENTS


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T+o me(*o%# o& com("ng "ncome *a-e 'een %e-eloe%, one 'a#e% on -ar"a'le co#("ng an% (*e o(*er 'a#e% on

&ll or a'#or("on co#("ng)


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Absorption CostCalculations

Variable CostCalculation

$rodu*t *osts Dire*t materialsDire*t la+oroer-ead aria+le/ed oer-ead

Dire*t materialsDire*t la+oroer-ead aria+le

Cost $eriod #ellin0 e/enses

administratiee/enses

/ed oer-ead

#ellin0 e/ensesadministratiee/enses

Classifcation o Costs as Product or PeriodCosts Under Absorption and Variable

Costing


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Income S(a(emen(# U#"ng Var"

a'le an% A'#or("on Co#("ng

Beca#e n"( ro%c( co#(# are (*e 'a#"# &or co#( o& goo%# #ol

%, (*e -ar"a'le/ an% a'#or("on/co#("ng me(*o%# can lea% (o %"&&eren( oera("ng "ncome &"gre#)

T*e %"&&erence ar"#e# 'eca#e o& (*e amon( o& &"0e% o-er*ea% recogn"$e% a# an e0en#e n%er (*e (+o me(*o%#)


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Pro%c("on, Sale#, an% Income Rela("

on#*"#

T*e rela("on#*" 'e(+een -ar"a'le/co#("ng "ncome an% a'#or("on/co#("ng "ncome c*ange# a# (*e rela("on#*" 'e(+een ro%

c("on an% #ale# c*ange#


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T*e c*ange "n &"0e% o-er*ea% "n "n-en(or! "# e0ac(l! e1al (o (*e %"&&erence'e(+een (*e (+o "ncome#) T*"# c*ange can 'e com(e% '! ml("l!"ng (*e &"0e% o-er*ea% ra(e ("me# (*e c*ange "n (o(al n"(# "n (*e 'eg"nn"ng an% en%"ng "n-en(or"e# 2+*"c* "# (*e %"&&erence 'e(+een ro%c("on an% #ale#3) T*e %"&&erence 'e(+een a'#or("on/co#("ng oera("ng "ncome an% -ar"a'le/c

o#("ng oera("ng "ncome can 'e e0re##e% a#4

A+sortion*ostin0 in*ome

)aria+le*ostin0in*ome

Fi/edoer-eadrates

unitrodu*tion 4units sold 5


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E-ala("ng Pro&"( / Cen(er Mana

ger#T*e e-ala("on o& manager# "# o&(en ("e% (o (*e ro&"(a'"l"(! o&(*e n"(# (*e! con(rol)

"& "ncome er&ormance "# e0ec(e% (o re&lec( manager"al er&o

rmance, (*en manager# *a-e (*e r"g*( (o e0ec( (*e &ollo+"ng4

1. A# #ale# re-ene "ncrea#e# &rom one er"o% (o (*e ne0(, all o(*er (*"ng# 'e"ng e1al, "ncome #*ol% "ncrea#e)

2. A# #ale# re-ene %ecrea#e# &rom one er"o% (o (*e ne0(,all o(*er (*"ng# 'e"ng e1al, "ncome #*ol% %ecrea#e)

3. A# #ale# re-ene rema"n# nc*ange% &rom one er"o% (o(*e ne0(, all o(*er (*"ng# 'e"ng e1al, "ncome #*ol% rema"n nc*ange%)


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Segmen(e% Income S(a(emen(

# U#"ng Var"a'le Co#("ngVar"a'le co#("ng "# #e&l "n rear"ng #egmen(e% "ncome #(a(emen(# 'eca#e "( g"-e# #e&l "n&orma("on on -ar"a'le an% &"0e% e0en#e#)

A #egmen( "# a #'n"( o& a coman! o& #&&"c"en( "mor(ance(o +arran( (*e ro%c("on o& er&ormance reor(#)


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Mea#r"ng (*e Per&ormance o& In-e#(

men( Cen(er# U#"ng ROI


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Re(rn on In-e#(men(

One +a! (o rela(e oera("ng ro&"(# (o a##e(# emlo!e% "# (o com(e (*e re(rn on "n-e#(men( 2ROI3, +*"c* "# (*e ro&"( earne% er %ollar o& "n-e#(men() ROI "#' *e mo#( common mea#

re o& er&ormance &or an "n-e#(men( cen(er) I( can 'e %e&"ne%a# &ollo+#4

ROI 5 Oera("ng Income 6 A-erage Oera("ng A##e(#

A-erage oera("ng a##e(# 5 2 Beg"nn"ng Ne( 'oo7 -alel 8 En%"ng ne( 'oo7 -ale3 6 9


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Marg"n# an% Trno-er

A #econ% +a! (o calcla(e ROI "# (o #eara(e (*e &ormla 2Oera("ng "ncome6A-erage oera("ng a##e(#3 "n(o marg"n an% (rno-er)

ROI 5 Marg"n 0 (rno-er

5 Oera("ng ro&"( 0 ale#

ale# A-erage oera("ng a##e(#


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A%-an(age# o& ROI

A( lea#( (*ree o#"("-e re#l(# #(em &rom (*e #e o& ROI4

1. I( encorage# manager# (o &oc# on (*e rela("on#*" among #ale#, e0en#e#, an% "n-e#(men(, a# #*ol% 'e (*e ca

#e &or a manager o& an "n-e#(men( cen(er)

2. I( encorage# manager# (o &oc# on co#( e&&"c"enc!)

3. I( encorage# manager# (o &oc# on oera("ng a##e( e&&"c"enc!)


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D"#a%-an(age# o& (*e ROI Mea#

re1. I( can ro%ce a narro+ &oc# on %"-"#"onal ro&"(a'"l"(! a

( (*e e0en#e o& ro&"(a'"l"(! &or (*e o-erall &"rm)

2. I( encorage# manager# (o &oc# on (*e #*or( rn a( (*e

e0en#e o& (*e long rn)


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Mea#r"ng (*e Per&ormance o& In-e#men( Cen(er# U#"ng

Re#"%al Income an% Econom"c ValA%%e%


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To comen#a(e &or (*e (en%enc! o& ROI (o %"#corage "n-e#(men(# (*a( are ro&"(a'le &or (*e coman! '( (*a( lo+er a %"-"#"on:# ROI, #ome coman"e# *a-e a%o(e% al(erna("-e er&orma

nce mea#re# #c* a# re#"%al "ncome)


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Re#"%al Income

Re#"%al "ncome "# (*e %"&&erence 'e(+een oera("ng "ncome an% (*e m"n"mm %ollar re(rn re1"re% on a coman!:# oera("ng a##e(#4

Pro&"( 5 Pro&"( Income / 2M"n"mm ra(e o& re(rn ; a-erag

e

oera("ng a##e(# 3


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Econom"c Vale A%%e% 2EVA3


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Econom"c -ale a%%e% 2EVA3 "# ne( "ncome 2oera("ng "ncomem"n# (a0e#3 m"n# (*e (o(al annal co#( o& ca"(al) Ba#"call!,EVA "# re#"%al "ncome +"(* (*e co#( o& ca"(al e1al (o (*e ac(

al co#( o& ca"(al &or (*e &"rm 2a# oo#e% (o #ome m"n"mmra(e o& re(rn

%e#"re% '! (*e coman! &or o(*er rea#on#3)


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Calcla("ng EVA

EVA "# ne( "ncome, or a&(er/(a0 oera("ng "ncome, m"n# (*e %ollar co#( o& ca"(al emlo!e%

EVA 5 A&(er/(a0 oera("ng "ncome / 2Ac(al ercen(age

co#( o& ca"(al ; To(al ca"(al emlo!e%3


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Be*a-"oral A#ec(# o& EVA

A nm'er o& coman"e# *a-e %"#co-ere% (*a( EVA *el# (o encorage (*e r"g*( 7"n% o& 'e*a-"or &rom (*e"r %"-"#"on# "n a +a!(*a( em*a#"# on oera("ng "ncome alone canno()


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TRANSFER PRICING


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(*e -ale o& (*e (ran#&erre% goo% "# re-ene (o (*e #ell"ng %"-"#"on an% co#( (o (*e '!"ng %"-"#"on) T*"# -ale, or "n(ernal r"ce, "# calle% (*e (ran#&er r"ce) In o(*er +or%#, a (ran#&er r"ce

"# (*e r"ce c*arge% &or a comonen( '! (*e #ell"ng %"-"#"on (o(*e '!"ng %"-"#"on o& (*e #ame coman!)


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Imac( o& (*e Tran#&er Pr"c"ng on D"-"#"on# an% (*e F"rm a# a


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Tran#&er Pr"c"ng Pol"c"e#

T*e! are %e&"ne% &or eac* %"-"#"on a# &ollo+#4

1. T*e m"n"mm (ran#&er r"ce "# (*e (ran#&er r"ce (*a( +ol% lea-e (*e #ell"ng %"-"#"on no +or#e o&& "& (*e goo% +ere #o

l% (o an "n(ernal %"-"#"on (*an "& (*e goo% +ere #ol% (o an e0(ernal ar(!) T*"# "# #ome("me# re&erre% (o a# (*e =&loor> o& (*e 'arga"n"ng range)

2. T*e ma0"mm (ran#&er r"ce "# (*e (ran#&er r"ce (*a( +ol% lea-e (*e '!"ng %"-"#"on no +or#e o&& "& an "n( +ere

rc*a#e% &rom an "n(ernal %"-"#"on (*an "& (*e #ame goo%+ere rc*a#e% e0(ernall!) T*"# "# #ome("me# re&erre% (o a# (*e =ce"l"ng> o& (*e 'arga"n"ng range)


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Mar7e( r"ce

(*e 'e#( aroac* (o (ran#&er r"c"ng) S"nce (*e #ell"ng %"-"#"oncan #ell all (*a( "( ro%ce# a( (*e mar7e( r"ce, (ran#&err"ng "n(ernall! a( a lo+er r"ce +ol% ma7e (*e %"-"#"on +or#e o&&)


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Co#(/Ba#e% Tran#&er Pr"ce#

Fre1en(l!, (*ere "# no goo% o(#"%e mar7e( r"ce) T*"# ma! occr 'eca#e (*e (ran#&erre% ro%c( #e# a(en(e% %e#"gn# o+ne% '! (*e aren( coman!)


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Nego("a(e% Tran#&er r"ce

T*"# aroac* "# ar("clarl! #e&l "n ca#e# +"(* mar7e(

"mer&ec("on#, #c* a# (*e a'"l"(! o& an "n/*o#e %"-"#"on (o a-o"% #ell"ng an% %"#(r"'("on

co#(#


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TERIMA ?ASI.

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segmented reporting investment center evaluation and transfer pricing PPT