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When to buy a property |
Finance topics
Investment
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By admin on
3/21/2008
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 Many countries encourage residents to become owners of their homes and lands by regulating, among others, tax-deductible interest payments from loans. The cost of the loan becomes therefore: C = P x I x (1 - T), where: C = Cost of the loan P = amount of loan (Principal) I = Interest rate T = Income Tax rate For example, if the yearly interest for a loan of 100,000 EUR is 5% while the income tax rate is 35%, the resulting cost would be: 100,000 * 0.05 * (1-0.35) = 3,750 EUR each year, instead of 5,000 EUR. In reality there is a limit to the deductible amount (and that can be based on various cri ...
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Accounting Standards |
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Finance topics
Rules and Regulations
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By admin on
3/21/2008
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 Before globalization there were and there still are national economies. Each country has developed and regulated its own accounting standards with remarkable differences which are a consequence of local cultures and history. For instance, the Anglo-Saxon countries are inspired by principle of seeking to report “true and fair” value of assets and liabilities and strict adherence to the matching principle.
It requires judgment when applying it to not codified situations. Europe instead follows the principle of conservatism, which tends to underestimate assets and income, which can lead to substantial underestimation in certain industries. The Latin American systems include particular attention to the effects of inflation into reporting accounts.
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The Positive Economy |
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Finance topics
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By admin on
1/6/2008
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Positive vs. Negative Economy
A traditional electric company exploiting a fuel based central, although supposed to produce energy, actually depletes our planet Earth resources, has a low efficiency (about 70% goes on wasted heat) and contributes to accumulate CO2 in the environment. By considering our planet as a whole system or capital this kind of “production” has a negative budget on the domains of the energy, climate, resources, health and biodiversity.
The same is for our cars (down to 1% overall efficiency if we consider the weight of the car!), our houses, travels, vacations, ...
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Corporate Governance |
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Finance topics
Corporate
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By admin on
12/1/2007
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 Directors of organisations are given the mandate to manage funds on behalf of shareholders for the achievement of the organisational purpose. In doing so directors are delegated (Jensen and Meckling, 1976) to manage the conflicting interests of several stakeholders.
Directors are compensated for their role. Such compensations, though, may not be necessarily aligned with organisation’s success, thus preventing the best choice of strategy for the purpose and increasing rather than diminishing the role of self-interests.
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Offshore Investment |
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Finance topics
Investment
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By admin on
12/1/2007
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 What is it?
Investing offshore, as the name implies means taking your money outside the borders of your own country and investing it in overseas markets.
BenefitsThe main reason for wanting to do this is to spread the risk of your investment over more than one economy.
Besides, if you're living and working overseas, investing offshore may save you tax. All returns on offshore investments are currently paid without the deduction of tax.
You may also be able to reduce your tax liability in your home country by transferring savings and investments to an offshore bank. In addition to the tax savings, offshore banking offers confidentiality, security and greater global access and convenience.
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Living with a dear oil |
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Finance topics
Commodities
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By admin on
12/1/2007
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 Many countries encourage residents to become owners of their homes and lands by regulating, among others, tax-deductible interest payments from loans. The cost of the loan becomes therefore: C = P x I x (1 - T), where: C = Cost of the loan P = amount of loan (Principal) I = Interest rate T = Income Tax rate For example, if the yearly interest for a loan of 100,000 EUR is 5% while the income tax rate is 35%, the resulting cost would be: 100,000 * 0.05 * (1-0.35) = 3,750 EUR each year, instead of 5,000 EUR. In reality there is a limit to the deductible amount (and that can be based on various criteria fixed b ...
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CEOs: more gold than their own weight |
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Finance topics
Corporate
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By admin on
12/1/2007
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 An outstanding pay riseIn a 2007 special report The Economist had analysed the phenomenon of the ever increasing pay of CEOs in the top 50 companies of the S&P 500. This summary intends to give the main findings for our readers and spare them the long reading.
Two examples above all: Robert Nardelli received $210M when he lost his job at Home Depot. Carly Fiorina, HP, received $180M at the end of her mandate. None of them performed extremely well to justify that money; on the opposite, the shares of their respective managed companies performed poorly during their reign.
Despite arguable performance the trend for CEOs is to increase their pa ...
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