Auditing Reacquired Franchise Rights

Auditing Reacquired Franchise Rights Worksheet 1: Summary of Reacquired Franchise Rights Verifying Mathematical Accuracy of Reacquired Franchise Rights Balance It has been assumed that the beginning balance of reacquired franchise rights was audited last year. Therefore, changes (if any) to this account are audited in the current year so that an auditor can give an opinion on the balance of this asset. Reductions to this asset are likely to be due to a sale, other disposal, or impairment. However, based on the case facts, there is no indication of changes in the current year. The following were the procedures performed: Checking to see if the client reported any impairment Based on the case facts, Roman Holiday did not identify or report any impairment in the reacquired franchise rights in the current year. Ensuring that each Franchisee market recorded the correct amount for the BV of Reacquired Franchise Rights Roman Holiday did not sell or dispose any of its reacquired franchise rights (reductions)neither did they reacquire any new franchise rights (additions) during the current year. This is the reason that there was no change in the recorded amount for these assets. Verifying that the company correctly added the book values of the reacquired franchise rights to include all of the senior franchise markets (please refer to Appendix A) Upon reviewing the client-prepared schedule of reacquired franchise rights, the sum of the book values of these intangible assets, for each franchise market, totaled $127, 414, 000. However, there is a $2,000 ($127,414 127, 412)deviation between the actual total and the amount that the client reported on its balance sheet ($127, 412, 000). Since, a planned materiality of $5 million is being used this deviation is immaterial and islikely due to rounding errors. Based on the above procedures performed and the immaterial deviation between the actual total and the clients reported amount for the book value of the reacquired franchise rights, we feel that the proper amount has been recorded and as such no further procedures are necessary. Is the Indefinite life classification for the reacquired franchise rights correct? According to SFAS 142, it identifies how goodwill and other intangibles are accounted for after their acquisition or in this case their reacquisition. Essentially, it requires the classification of intangible assets as having either a definite or indefinite life. The main difference is that definite-life intangible assets are amortized in a pattern depending on how and when the economic benefits are expected to be received (e.g.: if expected evenly over each year then the straight line method of amortization should be used). In determining whether or not the indefinite-life classification for the reacquired franchise rights is correct we must review through the criteria in SFAS 142 and see how it relates to our client, Roman Holiday. According to SFAS 142, the estimate of the useful life of an intangible asset to an entity is based on an analysis of all pertinent factors, in particular the following[i]: The expected use of the asset by the reporting entity Case facts: Essentially, the purpose of reacquired franchise rights is to allow the franchisor (Roman Holiday) to utilize their own brand name in the specific senior franchisee market(s) that they reacquired the rights from. The expected useful life of another asset or a group of assets to which the useful life of the intangible asset may relate (such as mineral rights to depleting assets) Case facts: The group of assets that the reacquired franchise rights may relate to is the reacquisition of rights from existing and/or underdeveloped markets or restaurants. Under the contractual repurchase agreement, which has a useful life of 14 years, Roman Holiday is entitled to the use and benefit of these assets (e.g.: the right to continue operating existing restaurants and the right to collect royalties from sub-franchises developed by the Senior Associate) Any legal, regulatory, or contractual provisions that may limit the useful life Case Facts: same as part ii. (i.e.: The contractual agreement has a useful life of approximately 14 years which is the same length of the underlying Senior Associate agreement) Any legal, regulatory, or contractual provisions that enable renewal or extension of the assets legal or contractual life without substantial cost (provided there is evidence to support renewal or extension and renewal or extension can be accomplished without material modifications of the existing terms and conditions) Case facts: The Senior Associate Agreement has a useful life between 10-20 years (approximately 14 years). These agreements are renewable if mutually agreeable to both parties with no substantial costs or material modifications of the existing terms and conditions. The effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, known technological advances, legislative action that results in an uncertain or changing regulatory environment, and expected changes in distribution channels) Case facts: According to analysts, the companys growth will slow (indicating that the pizza industry is in its maturity stage) in the next few years but will still exceed industry averages. However, most of Roman Holidays revenue growth, in recent years, is largely due to the reacquisition of franchise rights and existing restaurants as opposed to real growth in the franchise itself. Therefore, Roman Holiday faces stiff competition in this highly competitive industry. In addition, the company markets itself as a gourmet pizza restaurant and only targets consumers willing to pay for a premium product. There are may substitute pizza places that consumers can go to such as Pizza Hut and Dominos Pizza unless Roman Holiday can continue to distinguish itself from these other restaurants (e.g.: incentives and price discounts). The level of maintenance expenditures required to obtain the expected future cash flows from the asset (for example, a material level of required maintenance in relation to the carrying amount of the asset may suggest a very limited useful life) Case facts: There is no maintenance expenditures related to reacquired franchise rights except annual impairment losses, if any. Based on the above pertinent criteria related case facts, we feel that the indefinite-life classification is wrong. Instead, it should have a definite life of 14 years, which is consistent with the underlying Senior Associate agreement. Beyond 14 years the intangible asset and its related benefits will expire. Worksheet 2: Auditee client impairment analysis SFAS 142 vs. SFAS 144 Types of Auditing Procedures to Evaluate Managements Assertions Clients Methodology in Estimating the FV of Reacquired Franchise Rights Verifying the mathematical accuracy of the clients estimation the FMV of Reacquired Franchise Rights Worksheet 3: Analysis of key assumptions Key assumptions made by client in arriving at the FMV Estimate Comparison to external internal information Which provides the greatest level of assurance? Information sources Preparation of a document request to the client Evaluating of key assumptions Evaluation of appropriateness of key assumptions Worksheet 4: Auditor impairment analysis on book value of reacquired franchise rights for Arizona acquisitions Is Clients Impairment Assessment Appropriate? The role of specialists What would be included in a set of working papers?

Fiat Chrysler Essay

1. According to a major economics consulting firms, Fiat`s  ¨South American operations are the jewel in the Italian company`s global operations ¨. Fiat has plants in Brazil and Argentina, and Brazil is the biggest market, well ahead of its home-country market. In 2011, with the Chrysler venture taking up more and more of the firm`s attention – and as European sales suffered a steep decline – rumors began to circulate that Marchionne might move Fiat headquarters from Italy to the United States. Discuss Fiat ´s takeover of Chrysler as part of strategy to transform itself from international business into a multinational or global business 2. What benefit does fiat hope to gain from its arrangement with Chrysler what potential drawback does it face? Judging from your analysis of benefits and drawbacks, explain why the Fiat-Chrysler arrangement might be characterized as strategic alliance? In what sense is it best characterized as a direct investment? 3. What challenges in the US cultural environment do you expect Fiat to face as it uses its Chrysler connection to compete in the American car market? What management challenges will Marchionne face in the areas of planning and decision making, organizing and leading? Before their merger, Fiat and Chrysler were two comparatively small regional companies overly reliant on just three auto markets—the U.S., Italy and Brazil. Through the first nine months of 2013, nearly 85% of the Fiat’s automotive revenue came from North America, Latin America and Europe. About two-third of its profit before interest and taxes came from North America, according to data on the company’s website. In the U.S., Chrysler, though profitable, still suffers from the drought of research and development spending in recent years—a gap acutely visible in midsize sedans. Chrysler faces significant investments to keep pace with rising U.S. government fuel efficiency standards. Chrysler-Fiat ranked last among 11 auto makers in a U.S. government scorecard of average fuel efficiency published in October. In Europe, Fiat faces some of the biggest challenges of any mass-market manufacturer. â€Å"Fiat’s European business is the most structurally challenged in the region,† said George Galliers, an  analyst at London-based broker International Strategy & Investment Group Fiat’s European market share has dwindled to 6.2% in the first 11 months of 2013 from 8.8% in 2009, according to the latest data. In November, Fiat sold fewer cars in Europe than it did in Brazil, and that South America market is now vulnerable amid worries over the sustainability of its economic growth. Fiat and Chrysler also are working on new vehicle architectures, aiming to produce more models from fewer underlying sets of platforms. Analysts say it will be important for the vehicles to suit different markets without substantial and costly revisions. Another part of the Fiat-Chrysler strategy is to use Chrysler’s U.S. factories to build Fiat models and vice versa, helping to better distribute production and help fill Fiat’s half empty Italian factories. The first fruits of the integration are on display here, and promise to help Mr. Marchionne achieve his long-term goal of increasing global sales of the two companies to six million vehicles by 2014. Together, Fiat and Chrysler sold about 4.2 million cars and trucks last year. The marriage of an all-American Jeep with the Italian luxury heritage of a Maserati is the best evidence yet that Chrysler and Fiat can create products together that they could not afford to make independently, Ever since Fiat took control of Chrysler, Mr. Marchionne has said he planned to leverage the strengths of both companies and operate them as co-equals. â€Å"Daimler could never figure out what to do with Chrysler because they had no interest in integrating it into their business,† Mr. Hall said. â€Å"But Fiat actually believes it needs Chrysler for mass purchasing of parts.† The strategies used by the multinational enterprises are extremely diverse. Our purpose in this paper is not to explore their multitude, but to have a better picture of the most successful strategies employed by large multinationals, analyze their strengths and weaknesses and derive the main factors that create a difference. We found innovation, cost reduction and market conditions as key elements supporting a successful internal strategy and strategic alliance and diversification to be among the most widely applied strategies for a foreign market penetration and development, while fusions and licenses were the least preferred. Conclusion: Lots and lots of question marks. It all depends on how it goes. If Fiat can pacify Chrysler, if the integration of Fiat-Chrysler works, if Americans really buy smaller-engine cars, if the new platforms prove successful, if they keep their position in Brazil and manage to break into Russia and China, if Europe recovers. However, there are good, solid reasons for hope of a better future. Dark clouds abound, but here and there, there are rays of sunshine. They are well-positioned in some key markets. They’ve established a foothold in North America. They have a big presence and are a player in markets all over the world (except Asia). The cars are more reliable than ever before, yet still manage to be engaging and more fun than some of the competition and most owners are satisfied. Their new engines are renowned and studied and copied by other makers as they really do point a way into an ever more frugal future. However, do they have the capacity to overcome the difficulties? You can be an optimist or a pessimist, but the reality is†¦ Only time will tell. What Does Chrysler Get? Fiat will share with Chrysler its platforms and powertrain technology, including engines, transmissions, and fuel-saving tech. Today’s announcement specifically mentions city and compact vehicles, products Chrysler will need should American consumers actually decide to buy the small, fuel-efficient cars U.S. lawmakers claim they want. Chrysler will also get better distribution of its products, certainly in Europe, but also in places such as India—Fiat has a partnership with Tata Motors—and Brazil. Fiat also has a deal with Chery, the Chinese automaker with which Chrysler had been trying to partner. Both Chrysler and Fiat will also be able to better leverage their global supplier ties and therefore see cost savings in larger volume. What’s in it for Fiat? For Fiat, the reward is simple: distribution channels. Currently, Fiat only sells Maserati and Ferrari in the U.S., although Alfa’s gorgeous 8C has been sold here in extremely limited numbers, as well. If Fiat wants to become a truly global entity, a foothold in North America would be most helpful. Alfa Romeo has been promising a proper return to the U.S. market for some time, and Chrysler’s distribution network could ease that brand’s return to our shores—perhaps even saving some Chrysler dealers from closing altogether—and could also serve as a point of sale for potential Fiat and Lancia imports, too. Fiat will also likely be able to use excess global production capacity to assemble Chrysler-badged variants of its products. With worldwide auto sales slowing, that would help Fiat to continue manufacturing at pre-slowdown levels; Chrysler could potentially build Fiats in its plants, as well. A wrench in the works: Chrysler is still in a partnership with Nissan. One product of that hook-up is expected to be a Versa-based small car, possibly based on the Dodge Hornet concept. (That car was also rumored to have sprung from the potential Chrysler/Chery partnership.) We wonder how this new Italian-American deal might affect those already in place with Nissan, which include rebadging the new-for-2009 Dodge Ram as the replacement for the Titan. It’s All About Synergies—and Other Buzzwords Despite Fiat being on the financial ropes itself only a few years ago, Italy’s last remaining large car company has come fighting back like Rocky Balboa thanks in part to a $2-billion alimony payment from its annulled marriage with General Motors. Chrysler could do a lot worse when it comes to picking a dance partner for 21st century survival. Speculating further, here’s how a few Fiat products could make an impact. A caveat: most of Fiat’s vehicles weren’t designed with U.S. crash and emissions standards in mind (the 500 being an exception), so it’s possible that we’ll have to wait at least until the next generation of each of these cars arrives before they could be sold here. Fiat Grande Punto: It wouldn’t be much of an exaggeration to say that the Grande Punto is the car that saved Fiat. At the time of its introduction back in 2005, the Italian auto giant was staggering after years of neglecting the small-car market, a segment which had made it such a powerhouse from the 1950s through the ‘70s. Handsome, well-built, and economical, the Grande Punto surprised the automotive world by being, well, so unlike the rust-prone wheezeboxes Fiat had peddled to European consumers for the previous two decades. Maybe it didn’t single-handedly save Fiat, but had the Grande Punto flopped, it could have destroyed the company. Sized to compete with cars like the new Ford Focus and Honda Civic, this small Fiat would look nice rebadged as a Chrysler. Its range of economical  gasoline-fired engines (from a feeble but fuel-sipping 64-hp, 1.2-liter four-banger to the tire-smoking, 178-hp four found in the sporty Abarth SS model) could earn Chrysler green-car cred, props from the sport-compact crowd, and a valuable slice of the small-car market. So far, Fiat’s efforts to sell its European models in the U.S. and Chrysler’s American-designed sedans and Jeeps in Europe have produced lackluster results. Before their merger, Fiat and Chrysler were two comparatively small regional companies overly reliant on just three auto markets—the U.S., Italy and Brazil. Multinational, Global, International, and Transnational Companies Because international business is a relatively new discipline and is extremely dynamic, you will find that the definitions of a number of terms vary among users. For example, some people use the words world and global interchangeably with multinational to describe a business with widespread international operations, but others define a global firm as one that attempts to standardize operations in all functional areas but that responds to national market differences when necessary. According to this definition, a global firm’s management 1. Searches the world for (a) market opportunities, (b) threats from competitors, (c) sources of products, raw materials, and financing, and (d) personnel. In other words, it has global vision. 2. Seeks to maintain a presence in key markets. 3. Looks for similarities, not differences, among markets. Those who use global in this manner are defining a multinational company as a kind of holding company with a number of overseas operations, each of which is left to adapt its products and marketing strategy to what local managers perceive to be unique aspects of their individual markets. Some academic writers suggest using terms such as multidomestic and multilocal as synonyms for this definition of multinational. You will also find those who consider multinational corporation to be synonymous with multinational enterprise and transnational corporation Marchionne made it clear that if FIAT was to survive the global crisis, it had to become a global player, and more particularly one of the six world-class manufacturers capable of producing and selling six million vehicles per year. For this reason, a profound reorganization of internal governance and productive processes was needed, along with a strategic alliance with other car manufacturers around the world. The implication of this strategy was that FIAT could no longer tie its own interests with those of its home country, unless all the players involved (employees, trade unions, the Government and the employers’ association itself) were prepared to comply with the company’s requirements. Thus, in the public discourse of the CEO, the exit option, i.e. the scenario of FIAT moving its plants to sites with lower labour costs in Eastern Europe or elsewhere, became feasible.3 The joint venture with the US manufacturer Chrysler in 2009, which, after the acquisition of a majority share by FIAT, should be considered to be a merger, marks the achievement of the status of global player by the company (hereinafter, FIAT-Chrysler, or the Group).

Why Everyone Is Talking About Uc Berkeley Essay Samples

Why Everyone Is Talking About Uc Berkeley Essay Samples So once you're drafting, don't fret about word count. Which 3 of the 7 you opt to answer are entirely your decision. You don't need to have an entire draft to work with a tutor. You will be writing drafts. Make certain your essay explains everything the reader has to know to comprehend what you were facing. As you're once more likely to be limited to 350 words, you won't be in a position to fit all the ways you exhibit your unique bit of awesomeness within this essay. Not only are you going to describe the challenge itself, but you are going to speak about what you did when faced with that. For more help, take a look at our article on creating wonderful tips for your essay topic. Definitions of Uc Berkeley Essay Samples A careful balance has to be struck between them both. Otherwise, you should beef up your details. Because personal statements are short, you just won't have enough time to spell out everything you've l oved about a specific subject in enough detail to make it count. Thus your own personal statement, first of all, should describe your voice. The second portion of this essay would like you to examine the present instead. The benefit of doing them after is they can serve as drafts to the essay you will come to complete, but you might not be as connected to the experience you would like to share. Begin by drafting a response to one of the essays in the very first category. Before answering the question, think about the aim of the essay. After you've got this outline, you can proceed and translate it onto your essay. The prompt for this essay clarifies that even when you don't have a special story to tell, you still need to don't hesitate to select this topic. If a letter should be translated, employ a skilled translator. Like a personal essay, a very good recommendation letter is tough to write and demands a particular level of mastery over the English language. They're also searching for your creativity and problem-solving skills. They're searching to secure you in. Thus don't hold back, even when you're that future accountant who would like to minor in animation and Portuguese. Moreover, the normal fashion of recommendation letters is completely different in Asian education systems, which results in a letter which may feel very foreign to US admissions officers. Don't forget that the admissions won't base their decision within this part only. With an admission in the university, I won't only be in a position to move to take my education ahead but will also have the ability to fulfill a diverse assortment of scholars from all over the world. Explain your reason behind transferring if you're applying from a four-year institution or a community college outside California. If you're on an immediate path to a particular area of study or career pursuit, admissions officers definitely need to understand that. Our customer support will gladly tell you whether there are any special offers at the present time, along with make sure you are getting the very best service our company may deliver. I said no to the offer and began my own company instead. Blockchain has turned into the most important technology you may not yet understand. The UC system has ever had one principal application that each one of the campuses share. Get the Scoop on Uc Be rkeley Essay Samples Before You're Too Late Remember that for some things the explanation may be obvious. The essay is intended to be a revealing look within your ideas and feelings. Because this essay will necessarily have to devote some time on other men and women, you should get a great proportion of them-time and me-time. It wants to know whether this mindset of out-of-the-box-ness is something you are already comfortable with. The point is to share the sorts of things which don't wind up on your transcript. This question is attempting to probe the way that you express yourself. Before you may fix an issue, you've got to understand that the problem exists. When it's no problem, you can simply substitute in the term topic'.

Judicial Review And The Indian Courts - 2740 Words

JUDICIAL REVIEW AND THE INDIAN COURTS Introduction Judicial Review is basically an aspect of judicial power of the state which is exercised by the courts to determine the validity of a rule of law or an action of any agency of the state. The courts have the power of testing the validity of legislative as well as other governmental action with reference to the provisions of the constitution. The judiciary tries to undo the harm that is being done by the legislature and executive and they also try to provide every citizen what has been guaranteed by the constitution. Judicial review has a more technical significance in pubic law, particularly in countries having a written constitution which are founded on the concept of limited government.†¦show more content†¦Judicial Review in India The constitution of India, in this respect, is more similar to the U.S. Constitution than the British. Under the constitution of India parliament is not supreme. Its powers are limited in the two ways. First, there is the division of powers between the union and the states. Parliament is competent to pass laws only with respect to those subjects which are guaranteed to the citizens against every form of legislative encroachment. The power of judicial review of legislation is given to the judiciary both by the political theory and text of the constitution. There are several specific provisions in the Indian constitution, judicial review of legislation such as Act 13, 32, 131-136, 143, 226, 145, 246, 251, 254 and 372. Judicial review is a great weapon in the hands of judges. It comprises the power of a court to hold unconstitutional and unenforceable any law or order based upon such law or any other action by a public authority which is inconsistent or in conflict with the basic law of the land. In fact, the study of constitutional law may be described as a study of the doctrine of judicial review in action. The courts have power to strike down any law, if they believe it to be unconstitutional. In the case I.R. Coelho v. State of Tamil Nadu the court laid down a two-fold test: : (a) whether an amendment or a law is violative of any of the Fundamental Rights in Part III (b) if so, whether the violation