国际会计案例集锦.docx

Chapter 1Case 1.1E-CENTIVES, INC.-RAISING CAPITAL IN SWITZERLANDOn October 3, 2000, E-Centives, incorporated in the United States made an initial public offering on the Swiss Stock Exchanges New Market. The company raised approximately US$40 million. E-Centivess offering circular stated that no offers or sales of the companys common stock would be made in the United States, and that there would be no public market for the common stock in the United States after the offering.THE SMISS EXCHANGES NEW MARKETThe Swiss Exchange launched the New Market in 1999. The New Market is designed to mmet the financing needs of rapidly growing companies from Switzerland and abroad. It provides firms with simplified means of entry to the Swiss capital markets. Listing requirements for the New Market are simple. For example, companies must have an operating track record of 12 months, the initial public listing must involve a capital increase, and to ensure market liquidity, a bank must agree to make a market in the securities.E-CentivesE-Centives, Inc, is a leading online direct marketing infrastructure company. The company offers systems and technologies that enable businesses to build large, rich databases of consumer profiles and interests. In return, consumers receive a free promotional offers based on their interests. At the time of the public offering, E-Centives maintained over 4.4 million E-Centives online accounts for members. The company does not charge members a fee for its service. Instead, that company generates revenue primarily from marketers whose marketing matter is delivered to targeted groups of E-Centives members. E-Centives currently employs more than 100 people in its Bethesda, Maryland headquarters, and its offices in Redwood City, New York and Los Angeles.As of the offering date, the company had little revenue and had not been profitable. Revenue for the year ended December 31, 1999, was $740000, with a net loss about US$16 million. As of June 30,2000, about US$39 million. E-Centives growth strategy is to expand internationally. To date, the company has focused on pursuing opportunities in the United States. E-Centives intends to expand into Europe and other countries. The company is currently considering expanding into Switzerland, the United Kingdom, and Germany.REQUIRED:1. Which factors relevant for choosing an overseas market for listing or raising capital. Which factors might have been relevant in E-Centives decision to raise capital and list on the Swiss Exchanges new market?2. Why do you believe E-Centives choose not to raise public equity in the United States? What are the potential drawbacks related to E-Centives decision not to raise capital in the U.S PUBLIC MARKETS?3. What are the advantage and disadvantages to E-Centives of using U.S.GAAP?4. Should the SWX Swiss Exchange require E-Centives to prepare its financial statements using Swiss accounting standards?5. Learn more about the New Market at the SWX Swiss Exchanges Web site (). What are the listing requirements for the New Market? What are the financial reporting requirements? Does E-Centives appear to fit the profile of the typical New Market company?Case 1.2: Toyotas Global ExpansionIn November 2004, Hiroshi Okuda, Chairman of Toyota Motor Corp. of Japan, announced that the company was going to build another factory in North America, raising the number of factories producing parts or assembling cars and trucks in North America to 14. As of May 2004, Toyota manufactured parts and assembled cars in 51 overseas manufacturing companies in 26 countries/locations. In 1980, the company had only 11 production facilities in 9 countries, so it was essentially servicing the world market through exports from Japan. Since 1980, however, the company has committed more energy and resources into foreign production.Toyota, the second largest auto manufacturer in the world, is moving aggressively to overtake leader General Motors in terms of volume. In 2004-2005, GM sold 7.4 million vehicles worldwide, and the company expects to increase sales to 8.5 million vehicles by 2006. Even though Toyotas major manufacturing base is in Japan, with 12 plants located closely together around Toyota City in Aichi Prefecture, it is expanding its manufacturing capabilities to every corner of the world, including Russia. However, it is clear that Toyota is betting more on production in countries outside of Japan. Although Toyota hopes to produce 3.8 million vehicles in Japan by 2006, it plans on doubling its foreign output to 6 million vehicles sometime in the future. It currently produces more vehicles in Japan than it does in its overseas plants, and it exports more of its domestic production than is sold inside of Japan.Toyota is known for its commitment to low cost, high quality, and just-in-time inventory, which implies that it must be close to its main suppliers. A major reason for the companys success in Japan is its close proximity to key suppliers, such as Nippon Denso, which allows it to schedule the delivery of parts as soon as they are needed in the assembly operations.One of Toyotas major advantages is its strong cash position. Its cash and short-term investments totaled $30 billion in 2004, even though GMs cash and short-term investments at the end of the 3rd quarter 2004 were nearly double that at $58.623 billion, down slightly from the same quarter a year earlier. However, Toyotas strong earnings and cash positions are in contrast to GM, which is constrained by weak credit ratings, rising health-care and pension costs, and losses in its automotive division. Toyota expects to use its strong financial position to expand operations worldwide and increase its commitment to R&D, especially in safety, automation, and environmentally friendly vehicles, such as the Prius, one of its hybrid cars.In spite of its strong commitment to future growth, Toyota has some challenges. Its net profits in the second quarter of 2004 dropped from 301.9 billion a year earlier to 297.4 billion. Toyota reports its financial information in yen, although it reports earnings according to U.S. generally accepted accounting principles due to its active presence on global capital markets and the universal acceptability of U.S. GAAP. Operating in global markets is a challenge for Toyota. Since it is a Japanese company that reports financial information in Japanese yen, it is subject to exchange rate fluctuations. In particular, the yen has been strong relative to the U.S. dollar, so earnings of its U.S. operations have fallen in yen terms in recent years when translated from dollars back to yen. In addition to the strong yen, Toyota and other companies operating in the U.S. market have struggled with high gasoline prices and high competition, which have cut into profit margins. Toyota has also suffered with high raw materials costs, both inside Japan and in its other operations worldwide. It is important for the company to do well in North America, because it accounts for about two-thirds of the Japanese car industrys profits on an operating level. Given Japans rapidly aging population and the sluggish economy, Toyota and other Japanese car manufacturers will have to do well in the United States to survive. Toyota services U.S. markets through significant exports from Japan as well as assembly inside North America. Because Canada, the United States, and Mexico are members of the North American Free Trade Agreement, parts and final vehicles can be moved from one country to the other duty-free, as long as the North American content is at least 62.5% of total cost. It has plans to assemble the Tacoma in Mexico; it assembles the Corolla, Matrix, and RX33 in Canada; and it assembles the Corolla, Tacoma, Avalon, Camry, Solera, Tundra, Sequoia, and Sienna in the United States. It is firmly committed to manufacturing cars and trucks in developing countries, especially Thailand, and it is making a big push to assemble in China. It also has plans to expand in South America, probably in Brazil where it already produces the Corolla, and it plans to expand into Russia, which would then join Poland and the Czech Republic as former members of the Soviet Union that have production facilities. Another factor influencing Toyotas growth abroad is the opening of the European Union. In 1999, the EU countries finally opened the doors to Asian car makers, and their market share rose from 14.8% to 17.4% at the expense of Ford, GM, Volkswagen, and other European manufacturers. Due to high wages in Europe, which have reached $40.68 per hour for average wages including health-care costs, Asian auto makers are increasingly establishing assembly operations in Eastern Europe, where wages are significantly lower. In Poland, for example, wages are only $8.63 per hour. Thus it appears that Toyotas strategy of making vehicles in Poland, the Czech Republic, and Russia makes sense. If the sluggish European market can recover, Toyota may have a bright future there.Questions1. Why do you think Toyota is expanding so aggressively outside of Japan instead of focusing more on manufacturing in Japan and exporting to other countries?2. What are the risks it faces in expanding its overseas manufacturing?3. Where do you think Toyota should put its next plant in North America, and what factors should it consider in making that decision?4. What are some of the major accounting issues that Toyota faces as it expands its global reach? What are the pros and cons to Toyota of issuing its financial statements according to U.S. GAAP?Case 1.3: Sinopecs Global ExpansionCompany ProfileChina Petroleum & Chemical Corporation (Sinopec Corp) is a China-based energy and chemical company. The Company through its subsidiaries engages in oil and gas and chemical operations in the Peoples Republic of China (PRC). Oil and gas operations consist of exploring for, developing and producing crude oil and natural gas; transporting crude oil and natural gas by pipelines; refining crude oil into finished petroleum products; and marketing crude oil, natural gas and refined petroleum products. Chemical operations include the manufacture and marketing of a range of chemicals for industrial uses. The Company operates in four business segments: exploration and production segment, refining segment, marketing and distribution segment and chemicals segment, and corporate and others.HistoryIn 1998, the country carried out a great reform in the management of the petroleum and petrochemical industry. According to the principle of separating the government functions from enterprises management, competing in order, China set up two major oil corporations, China Petroleum Corporation and China petrochemical industry Corporation. With the support of state policies and enterprises efforts, Chinese Government strived to turn these two oil Corporations into a world-famous multinational corporation that would support the national economic construction with stronger competitiveness and higher prestige in the international market. These two corporations have continuously carried on a series of nationwide reform aiming for the above-mentioned goal since 1998. In October 2000, China petrochemical industry Corporation succeeded in being listed in Hong Kong, London, and New York at the same time after two years of reshuffle and preparation. In August 2001, Sinopec Corp. was successfully listed on the Shanghai Stock Exchange.China Petrochemical Industry was on the way to international capital market from then on.The Company was incorporated on 25th February, 2000 by China Petrochemical Corporation (hereinafter referred to as Sinopec Group) as the sole initiator, pursuant to the Company Law of the Peoples Republic of China. Sinopec issued 16.78 billion H shares in Hong Kong, New York and London Stock Exchanges on 18th and 19th October, 2000. The Company floated 2.8 billion A shares in Shanghai Stock Exchange on 16th July, 2001. As of end 2009, the Companys total number of shares were 86.7 billion, of which 75.84% were held by Sinopec Group, 19.35% were shares listed overseas and 4.81% were domestic public shares.The following table contains the significant events about Sinopec Corp. from 2000 to 2008:February 28, 2000 As the sole initiator, China Petrochemical Corporation (Sinopec Group) incorporated China Petroleum & Chemical Corporation (Sinopec Corp.). October 18, 2000 Sinopec Corp. made a successful global IPO at Hong Kong, New York and London Stock Exchanges with a total issuance of 16.78 billion H shares (including ADRs in the US).July 16, 2001 On July 16, 2001, Sinopec Corp. issued 2.8 billion A shares in the PRC market.On August 8, 2001, Sinopec Corp. was successfully listed on the Shanghai Stock Exchange.August 24, 2001 Sinopec Corp. acquired Chinas New Star Petroleum Company. December 31, 2004 Sinopec Corp. acquired chemical assets, catalyst assets and service stations from Sinopec Group and sold down-hole operation assets as a swap.October 10, 2006 Reform on share-split for A-share was implemented.October 11, 2006 Capital was injected into Hainan Petrochemical Co., Ltd. to increase its registered capital. Upon the completion of the capital increase, Sinopec Corp. held 75% of the equity interests in Hainan Petrochemical Co., Ltd.December 31, 2006Sinopec Corp. acquired the oil production assets of Shengli Petroleum Administration Bureau from Sinopec Group.April 17, 2007 Sinopec Corp. issued HK$11.7 billion convertible bonds overseas.December 31, 2007 Sinopec Corp. acquired five refineries including Zhanjiang Dongxing from Sinopec Group.February 20, 2008 On February 20, 2008, Sinopec Corp. issued RMB30 billion convertible bonds with warrants in PRC market.On March 4, 2008, bonds and warrants went public on Shanghai Stock Exchange.【1】Shares and Bonds: Where They Come From and Where They GoThe Company was established on 25 February 2000 with a registered capital of 68.8 billion domestic state-owned shares with a par value of RMB 1.00 each. Such shares were issued to Sinopec Group Company in consideration for the assets and liabilities of the Predecessor Operations transferred to the Company.Pursuant to the resolutions passed at an Extraordinary General Meeting held on 25 July 2000 and approvals from relevant government authorities, the Company is authorised to increase its share capital to a maximum of 88.3 billion shares with a par value of RMB 1.00 each and offer not more than 19.5 billion shares with a par value of RMB 1.00 each to investors outside the PRC. Sinopec Group Company is authorised to offer not more than 3.5 billion shares of its shareholdings in the Company to investors outside the PRC. The shares sold by Sinopec Group Company to investors outside the PRC would be converted into H shares.In October 2000, the Company issued 15,102,439,000 H shares with a par value of RMB 1.00 each, representing 12,521,864,000 H shares and 25,805,750 American Depositary Shares (“ADSs”, each representing 100 H shares), at prices of HK$ 1.59 per H share and US$ 20.645 per ADS, respectively, by way of a global initial public offering to Hong Kong and overseas investors. As part of the global initial public offering, 1,678,049,000 domestic state-owned ordinary shares of RMB 1.00 each owned by Sinopec Group Company were converted into H shares and sold to Hong Kong and overseas investors. 【2】The proceeds from the issuance of H shares of Sinopec Corp in 2000amounted to RMB 25.802 billion. After deducting the issuance expenses, the net proceeds from the issuance of H shares amounted to RMB 24.326 billion, of which RMB 4.5 billion was used in 2000 for repayment of loans, RMB 13.735 billion was used in 2001, RMB 2.818 billion was used in 2002. In the period convered by this report, RMB 3.273 billion was used, of which RMB 2.273 billion was used for exploration and development and building up production capacity, RMB 540 million was used for the BASF-Yangzi Integrated Site Project, whilst RMB 360 million for the Shanghai Secco Project. As at the date of 31 December 2003, the proceeds from the issuance of H shares were all used up.【3】In July 2001, the Company issued 2.8 billion domestic listed A shares with a par value of RMB 1.00 each at RMB 4.22 by way of a public offering to natural persons and institutional investors in the PRC.【2】On 25 September 2006, the shareholders of listed A shares accepted the proposal offered by the shareholders of state-owned A shares whereby the shareholders of state-owned A shares agreed to transfer 2.8 state-owned A shares to shareholders of listed A shares for every 10 listed A shares they held, in exchange for the approval for the listing of all state-owned A shares. In October 2006, the 67,121,951,000 domestic state-owned A shares became listed A shares.【4】In 2001, the proceeds from the issuance of A shares of Sinopec Corp. amounted to RMB 11.816 billion. Excluding issuance expenses, the net proceeds from the issuance of A shares amounted to RMB 11.648 billion, of which RMB 7.766 billion was used in 2001 mainly for the acquisition of Sinopec National Star and to supplement the Companys working capital. In 2002, RMB 696 million was used mainly to cover the initial preparation costs of the southwest oil products pipeline project and to build the Ningbo-Shanghai-Nanjing crude oil pipeline. In 2003, RMB 1.514 billion was used, of which RMB 700 million was used for building the southwest oil products pipeline and RMB 814 million was used for building the Ningbo-Shanghai-Nanjing crude oil pipeline. RMB 1.061 billion was used in 2004 for the southwest oil products pipeline project. RMB 611 million was used during this reporting pe