Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 11 January 1999
Length: 9 pages
Data source: Field research
Abstract
The president and controller of Western Chemical Corp are discussing the best way to measure and report performance of foreign subsidiaries. One subsidiary is a joint venture with its own borrowing capacity; another is wholly-owned; and a third is wholly-owned and serves as a sales base for regional sales. Applying generally accepted accounting principles gives income measurements that seem to conflict with true success of the operations.
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Abstract
The president and controller of Western Chemical Corp are discussing the best way to measure and report performance of foreign subsidiaries. One subsidiary is a joint venture with its own borrowing capacity; another is wholly-owned; and a third is wholly-owned and serves as a sales base for regional sales. Applying generally accepted accounting principles gives income measurements that seem to conflict with true success of the operations.