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Finance - Coggle Diagram
Finance
economic and financial flows
Balance of payments
Global imbalances
Public vs Private
surplus vs deficits
higher saving force trading partners to tackle corresponding deficits
Lower demand, less investment, longer recession
FDI
Portfolio investments
Role of IMF
Economic cooperation to avoid competitive devaluations.
Competitive devaluations
made by countries that reduce value of their exchange rates to make exports cheaper
Ensure stability of international monetary system
system of exchange rates and international payments
Multinational companies
Increased concentration of power, influencing policies on taxes
Tax avoidance
shift profits across borders to take advantage of lower tax rates
New tax requirements
country by country reports
Master file
Local files
Exchange rate issues
Volatile exchange rates affect assets and liabilities
falling currency helps exports but increases imports/ cost of inflation
Financial reporting
IFRS
Common reporting standards
Understandable
comparable across international boarders
Most worlds capital markets require IFRS standards
Different jurisdictions
different legal systems
common law
Roman law
cultural issues