ACCA P4 AFM Advance Financial Management

ACCAspace

Provided by
ACCA Research Institute



ACCA P4
Advanced Financial Management (AFM)
高级财务管理
ACCA Lecturer: Lily Wang




ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com

, P4 Chapter 8 Content


1 Financing foreign projects


2 Dividend policy in multinational companies


3 Dividend capacity


4 Transfer pricing


5 Analysis of comprehensive example




ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 2

, 1.Financing foreign projects

 Foreign currency denominated finance
• The main reason for wanting to borrow in a foreigh currency is to fund
a foreign investment project or foreign subsidiary.
• The foreign currency borrowing provides a hedge of the value of the
project of subsidiary to protect against changes in value due to
currency movements. The foreign currency borrowing can be
serviced form cash flows arising from the foreign currency investment.
 Financing options for international investments
The main options are:
• use the investment's own free cashflows
• use finance raised in the parent entity's home country(denominated
in either the parent's currency or the currency of the subsidiary)
• use finance raised in the subsidiary's country
• use finance raised in a completely separate country

ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 3

, 1.Financing foreign projects

 Specific foreign currency financing options
There is a variety of sources of foreign currency denominated finance
available:
 Short-term funding
• Eurocurrency loans
• Syndicated loans
• Short-term syndicated credit facilities
• Multiple option facilities
• Euronotes
 Long-term funding
• Syndicated loans
• Eurobonds




ACCAspace 中国ACCA特许公认会计师教育平台 Copyright © ACCAspace.com 4