Research Fraud in Allegra Goodman’s Intuition and Carl Djerassi’s Canto

Inspiring a 2002 feature film in which Leonardo DiCaprio portrays him, Frank William Abagnale, Jr. is arguably one of the most memorable fraudsters of our time. Abagnale assumed several different identities and forged checks worth millions of dollars. This type of fraud, known as financial fraud, is what many people first think of when the word â€Å"fraud† is mentioned. There are, however, other definitions of the word. One area of particular interest to us is the use of fraud in the field of science and research. This is an issue in both Allegra Goodman’s Intuition and in Carl Djerassi’s Cantor’s Dilemma. In both novels, the characters sort of skirt around the issue (at least at first) as this is a very taboo topic no matter the subject area. However, not all scientific fraud is created equal. Goodman seems to use a much more conventional approach by demonstrating outright fraud, while Djerassi, who is more privy to the real world that sc ientists face, gives us a more subtle view. Intuition’s Cliff Bannaker and Cantor’s Dilemma’s Jeremiah â€Å"Jerry† Stafford were both expected to yield results in the experiments that they conducted. Pressures existed to complete and publish the results before other labs could do the same and, thus, be credited with the discovery. Because both scientists were working at smaller labs with fewer employees and a smaller budget, time was a very important factor in any decision that was made. Long, sleepless days and weeks went by for these men and I can only assume that this, coupled with the pressure they experienced from their superiors, contributed to the way that they dealt with problems that arose in the course of the experiments. Jerry snuck in to the laboratory to correct an er... ...detrimental effects on cancer patients who are being treated with the supposed new working method. Not to mention the possible psychological pain the false results could give them in which they think there is a new miracle cure for their condition and they gain hope which is dashed when they realize that it does not actually work. Scientific fraud is unethical, as all fraud is, and should obviously not be committed by anyone. Even ex-con Frank Abagnale, Jr. was eventually caught and now runs a financial fraud consulting company and is a consultant for the Federal Bureau of Investigations. Cliff and Stafford both move on with their individual lives after the incident and, I am sure, did not commit fraud again (as is the case with Abignale). Only an idiot or a crazy person would try to commit the same crime for which they have already been caught a second time.

Energy Crisis: Is America In Trouble :: essays research papers fc

Global energy crisis threatens, scientist says CHICAGO (April 17, 1997) -- An impending global energy crisis with potentially massive impact on American industry and jobs can be avoided if America strives for a portfolio of energy systems, a distinguished scientist said here today. In advocating an end to name-calling between energy advocates and environmentalists, Alan Schriesheim said, "We cannot set effective energy policy in an environmental vacuum, nor can we set effective environmental policy in an energy vacuum." Schriesheim, director emeritus at Argonne National Laboratory, spoke at a gathering sponsored by the Chicago Academy of Sciences at the University Club of Chicago. Energy demand will soar worldwide over the next 20 years, he said. "What do you think might happen," he asked the audience, "to the world's energy needs and environmental concerns if we added a new United States to the planet every three years for the next 20 years? This is not an academic question. The world population today is growing at exactly that rate, and it is projected to continue growing at that rate through 2020." The bulk of that population growth will come in the poorer countries, Schriesheim said, "places where talk of energy policy comes second to talk of food and shelter and survival; places where, if the only affordable fuel is growing in the rain forest, you will take that fuel today without a moment's thought of the consequences tomorrow." The Argonne scientist's talk was titled "What Every High School Graduate Should Know About Energy," and was part of the Chicago Academy of Sciences lecture series "Science Literacy for the 21st Century: What Should Every High School Graduate Know?" Schriesheim told the audience that world population growth of more than 86 million people per year is "the equivalent of adding two cities the size of Chicago to the planet each month." "So not only will all the Earth's current population demand more energy in the years ahead," he said, "those billions of new people are going to want their share too." Schriesheim chided energy executives who dismiss environmental concerns, and environmentalists who dismiss the energy production potential of fossil fuels, flowing water, and uranium in favor of so-called "renewable" energy sources such as solar energy. He said that for the next several generations renewables -- such as solar, wind, and farm-grown energy crops -- are expected to provide only 2 to 4 percent of global energy supplies.

Masters of the Universe

Consolidation of Variable Interest Entities A Roadmap to Applying the Variable Interest Entities Consolidation Model March 2010 FASB material, copyright  © by the Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116, is reproduced with permission. This publication is provided as an information service by the Accounting Standards and Communications Group of Deloitte & Touche LLP. It does not address all possible fact patterns and the guidance is subject to change.Deloitte & Touche LLP is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte & Touche LLP shall not be responsible for any loss sustained by any person who relies on this publication.As used in this document, â€Å"Deloitte† means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see www. deloitte. com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. March 2010 Contents Acknowledgments Introduction Section 1 — Overview, Background, and Scope 1. 01 1. 02 Determining Which Consolidation Model to Apply Consideration of Substantive Terms, Transactions, and Arrangements Substantive Terms and Arrangements Scope and Scope Exceptions Overall Scope Considerations 1. 3 1. 04 1. 05 1. 06 1. 07 1. 08 1. 09 1. 10 1. 11 Application of the VIE Model in ASC 810-10 to Non-SPEs Qualification of a SPE as a Voting Interest Entity Application of the VIE Model in ASC 810-10 to Multitiered Legal Entity Structures Application of the VIE Model in ASC 810-10 to a Single Entity Held by a Holding Company Elimination of the QSPE Scop e Exception Determining Whether Employee Benefit Plans Should Apply the VIE Model in ASC 810-10 to Their Investments Scope Exception for Certain Investment CompaniesDefinition of Governmental Organization Determining Whether a Governmental Organization Was Used to Circumvent the Provisions of the VIE Model in ASC 810-10 Scope Exception for Not-for-Profit Organizations Scope Exception for Not-for-Profit Organizations: Circumvention of the VIE Model in ASC 810-10 Accounting Guidance for NFPs as a Result of the VIE Model in ASC 810-10 Determining Whether Entities That Present Their Financial Statements Similarly to a NFP Can Qualify for the Not-for-Profit Scope Exception Retention of a For-Profit Reporting Entity’s Accounting Policies in the Consolidated Financial Statements of a Not-for-Profit Reporting Entity Scope Exception for Separate Accounts of Life Insurance Entities Meaning of the Term â€Å"Exhaustive Effort† Application of Exhaustive-Efforts Scope Exception to an Inactive Entity Created Before December 31, 2003 Definition of a Business Under ASC 810-10-15-17(d) Effect of the Change in the Definition of a Business on the Business Scope Exception 1 2 5 6 8 8 9 10 10 10 11 12 13 14 14 14 15 15 15 16 17 17 17 18 18 18 19 19 19 20 20 21 21 21 Scope Exception for Employee Benefit Plans Scope Exception Related to Investments Accounted for at Fair Value Scope Exception for Governmental Organizations Scope Exception for Not-for-Profit Organizations 1. 12 1. 13 1. 14 1. 15 1. 16 Scope Exception Related to Separate Accounts of Life Insurance Entities 1. 17 1. 18 1. 19 1. 20 1. 21 Exhaustive-Efforts Scope Exception Business Scope Exception i 1. 22 1. 23 1. 24 1. 25 1. 26 1. 27 1. 28 1. 29 1. 30 1. 31 Applying the Business Scope Exception on aReporting-Entity-by-Reporting-Entity Basis Determining When a Reporting Entity Should Assess Whether It Meets the Business Scope Exception Under the VIE Model in ASC 810-10 Definition of a Joint Venture and Joint Control as Used in the VIE Model in ASC 810-10-15-17(d)(1) Determining Whether the Reporting Entity Participated Significantly in the Design or Redesign of the Legal Entity Scope Exception for Legal Entities Deemed to Be a Business — Determining Whether Substantially All of the Activities Either Involve or Are Conducted on Behalf of the Reporting Entity Scope Exception for an Entity Deemed to Be a Business — Determining Whether Financing Is Subordinated Additional Financial Support — Put and Call Options Business Scope Exception — Determining Whether More Than Half the Total of Equity, Debt, and Other Subordinated Financial Support Has Been Provided Lessee’s Determination of Whether a Capital Lease With an Entity Should Be Assessed Under the VIE Model in ASC 810-10 Consideration of Leasing Activities in Which the Legal Entity Is the Lessor 22 22 24 25 25 27 28 29 30 30 Section 2 — Determination of Whether the Reporting Entity Holds a Variab le Interest Identifying a Variable Interest 2. 01 2. 02 2. 03 2. 04 2. 05 2. 06 2. 07 2. 08 2. 09 2. 10 2. 11 2. 12 2. 13 2. 14 2. 15 2. 16 2. 17 2. 18 2. 19 2. 20 2. 21 2. 22 2. 23 2. 24 2. 5 Determining Whether a Holding Is a Variable Interest Identifying Whether a Reporting Entity Holds a Variable Interest Requiring Analysis Under the VIE Model in ASC 810-10 Determining When a Lease Represents a Variable Interest — Potential VIE Is a Lessor Determining When a Lease Represents a Variable Interest — Potential VIE Is a Lessee Determining Variable Interests Under the VIE Model in ASC 810-10 in a Synthetic CDO Structure When Decision-Maker Fees Are Not Treated as a Variable Interest Determining Variable Interests Under the VIE Model in ASC 810-10 in a Synthetic CDO Structure When Decision-Maker Fees Are Treated as a Variable Interest Netting of Instruments Other Than Equity Applying the VIE Model in ASC 810-10 to Trust Preferred Security Arrangements and Similar Structur es Implicit Variable Interests and â€Å"Activities Around the Entity† — Illustration Implicit Variable Interests — Call and Put Options Implicit Variable Interests — Total Return Swap Implicit Variable Interests —Back-to-Back Asset Guarantee Determining When an Implicit Guarantee (Variable Interest) Exists in a Related-Party Transaction Implicit Variable Interests — Waiving of a Management Fee Overview of the Guidance in ASC 810-10-25-21 Through 25-36 Applying the Guidance in ASC 810-10-25-21 Through 25-36 to Purchase and Supply Arrangements Applying ASC 810-10-25-21 Through 25-36 to PPAs, Tolling Agreements, and Similar Arrangements Off-Market Supply Agreements Determining Whether a Variable Interest Is Subordinated Financial Support Analyzing a MMF for Consolidation How to Determine Whether an Embedded Derivative Is Clearly and Closely Related Economically to Its Asset or Liability Host Applying the Guidance in ASC 810-10-25-35 and 25-36 Meaning of the Term â€Å"Derivative Instrument† in ASC 810-10-25-35 and 25-36 Meaning of the Term â€Å"Market-Observable Variable† in ASC 810-10-25-35 Meaning of the Term â€Å"Essentially All† in ASC 810-10-25-36 32 32 32 35 36 37 37 39 39 40 43 43 46 46 47 47 51 51 53 55 56 58 59 60 62 63 65 66 66 Implicit Variable Interests The By-Design Approach to Determining Variability ii Section 3 — Determination of Whether an Entity Is a VIE Determination of Whether Equity Investment at Risk Is Sufficient Under ASC 810-10-15-14(a) 3. 01 3. 2 3. 03 3. 04 3. 05 3. 06 3. 07 3. 08 3. 09 3. 10 3. 11 3. 12 3. 13 Determination of Equity Investment at Risk When the Investor’s Initial Accounting Basis of Its Equity Differs From Fair Value Including Mezzanine Equity Instruments in Total Equity Investment at Risk Determination of Whether a Personal Guarantee Provided by an Equity Holder Represents Equity Investment at Risk Determining Whether an Instrument With a R isks-and-Rewards Profile Similar to That of an Equity Investment Qualifies as Equity Impact of ASC 810-10-15-14(a) on the Determination of Total Equity Investment at Risk When the Investee Is a Foreign Entity Non-At-Risk EquityInvestment as a Variable Interest Definition of â€Å"Profits and Losses,† as Used in ASC 810-10-15-14(a)(1) Including Fixed-Rate, Nonparticipating Preferred Stock in the Total Equity Investment at Risk Determining Whether an Equity Interest Participates Significantly in the Profits and Losses of an Entity Impact of Put Options, Call Options, and Total Return Swaps on Equity Investment at Risk Impact of Contracts and Instruments That Protect an Equity Investor on Equity Investment at Risk Qualification of Equity Investments Issued in Exchange for Promises to Perform Services as Equity Investment at Risk Determining Whether Fees Received by an Equity Investor for Services Performed at Inception or in the Future Reduce Equity Investment at Risk Determinin g Whether Funds Borrowed by a Reporting Entity Qualify as Equity Investment at Risk Determining Whether a Quantitative Assessment of Equity Investment at Risk Is Necessary Qualitative Versus Quantitative Analysis of Whether an Entity Is a VIE Quantitative Expected-Loss Calculation — After Adoption of ASU 2009-17 Consideration of Subordinated Debt in a Qualitative Assessment of Sufficiency of Equity at Risk 68 69 70 70 70 71 71 71 72 72 73 73 74 76 77 77 78 78 78 79 80 81 81 82 83 84 84 85 86 87 87 88 88 90 90 91 92 92 93 94 94 95Equity Investments That Participate in Profits and Losses Equity Investments Provided Directly or Indirectly by the Entity Equity Investments Financed by the Entity 3. 14 3. 15 3. 16 3. 17 3. 18 Sufficiency of Equity Investment at Risk Determining Whether, as a Group, the Holders of the Equity Investment at Risk Lack Any of the Characteristics in ASC 810-10-15-14(b) 3. 19 3. 20 3. 21 3. 22 3. 23 3. 24 3. 25 3. 26 Characteristics in ASC 810-10-15-14(b) Held Within the Group of At-Risk Equity Investors Meaning of the Phrase â€Å"As a Group† in ASC 810-10-15-14(b) Impact of ASC 810-10-15-14(b) on Determining Characteristics of Control or Lack of Control by the Group of Holders of Equity Investment t Risk Minimum Amount of Equity Held By an Investment Manager or GP Ability of Holders of Equity Investment at Risk to Remove a Decision Maker Decision-Making Rights Granted to an Equity Holder Separately From Its Equity Investment at Risk Nonsubstantive Equity Investment of a GP Determining Whether a GP Interest Should Be Aggregated With an LP (or Other) Interest in the Evaluation of a Legal Entity Under ASC 810-10-15-14 Meaning of â€Å"Insignificant† in the Analysis of Fees Paid to a Decision Maker or Service Provider Meaning of the Term â€Å"Same Level of Seniority† Whether a Fee Paid to a Decision Maker or Service Provider That Represents a Variable Interest Could Potentially Not Be Significant to a VIE Determi ning Whether a Decision Maker or Service Provider Must Evaluate ASC 810-10-25-38A If the Fees Paid to the Decision Maker or Service Provider Do Not Represent a Variable Interest Reassessment of Fees Paid to a Decision Maker or Service Provider Determining Whether a Reporting Entity Lacks the Obligation to Absorb Expected Losses of the Entity Use of a Qualitative Approach to Determine Whether a Reporting Entity Has the Obligation to Absorb Expected Losses iii Analysis of Fees Paid to a Decision Maker or Service Provider 3. 27 3. 28 3. 29 3. 30 3. 31 3. 32 3. 33 Obligation to Absorb the Expected Losses of the Legal Entity 3. 34 3. 35 3. 36Determining Whether a Put Option on an Equity Interest Causes the Holders of the Equity Investment at Risk to Lack the Obligation to Absorb the Expected Losses of the Entity Determining Whether a Put Option on a Potential VIE’s Assets Causes the Holders of the Equity Investment at Risk to Lack the Obligation to Absorb the Expected Losses of th e Potential VIE Determining the Effect of Other Arrangements on the Ability of the Equity Group to Absorb Expected Losses or Receive Residual Returns Determining Whether an Investor Has the Right to Receive the Expected Residual Returns of a Legal Entity and Whether the Investor’s Return Is Capped Impact of an Outstanding Equity Call Option on Whether a Return Is Capped Impact of a Call Option on n Entity’s Assets on Whether a Return Is Capped Application of the VIE Test Under ASC 810-10-15-14(c) Considering a Reporting Entity’s Obligations to Absorb Expected Losses and Rights to Receive Expected Residual Returns Other Than Those Provided Through Equity Interests When Applying ASC 810-10-15-14(c) Anticipated Changes in the Assessment of Whether an Entity Is a VIE Future Sources of Financing to Include in a Potential VIE’s Expected Cash Flows Guidance on Reconsideration of Whether an Entity Is a VIE Valuation of Equity Investment at Risk When a Reconsidera tion Event Occurs Isolating the Impact of a Change in the Entity’s Governing Documents or Contractual Arrangements and the Impact of Undertaking Additional Activities or Acquiring Additional Assets Entering Into Bankruptcy Emerging From Bankruptcy Determining Whether a Development-Stage Entity Is a Business Development Stage Entities — Assessing the Sufficiency of Equity Investment at Risk 96 96 96 98 98 99 99 99 100 101 102 102 103 104 104 107 107 108 108 109 109 109Right to Receive the Expected Residual Returns of the Legal Entity 3. 37 3. 38 3. 39 3. 40 3. 41 Determining When the Equity Investors as a Group Are Considered to Lack the Characteristics in ASC 810-10-15-14(b)(1) Initial Determination of Whether an Entity Is a VIE 3. 42 3. 43 3. 44 3. 45 3. 46 3. 47 3. 48 3. 49 3. 50 Reconsideration of Whether the Entity Is a VIE Development-Stage Entities Section 4 — Expected Variability and the Calculation of Expected Losses and Expected Residual Returns 4. 01 4 . 02 4. 03 4. 04 4. 05 4. 06 4. 07 4. 08 4. 09 4. 10 4. 11 4. 12 4. 13 4. 14 4. 15 4. 16 Definitions of Expected Losses and Expected Residual Returns The Meaning of â€Å"Net Assets† Under the VIE Model in ASC 10-10 Purpose of Calculating the Expected Losses and Expected Residual Returns of the Entity How to Determine the Expected Losses and Expected Residual Returns of the Entity How to Determine the Expected Losses and Expected Residual Returns of the Entity — Example Use of the Indirect Method to Calculate Estimated Cash Flows Noncash Receipts or Distributions in the Determination of an Entity’s Estimated Cash Flow Scenarios Inclusion of Low-Income Housing or Similar Tax Credits in a Calculation of Expected Losses and Expected Residual Returns Effect of Options on Specific Assets in the Determination of the Entity’s Estimated Cash Flows Developing Estimated Cash Flow Scenarios and Assigning Probabilities for Expected Loss and Expected Residual Return C alculations Discount Rate to Use in the Calculation of Expected Losses and Expected Residual Returns Cash Flow and Fair Value Approaches to Calculating Expected Losses and Expected Residual Returns Appropriateness of Using Either the Cash Flow Approach or Fair Value Approach to Calculate Expected Losses and Expected Residual Returns Determining Whether Decision-Maker and Service-Provider Fees Are Included in Expected Losses and Expected Residual Returns Whether ASC 820-10 Affects an Expected Losses/Residual Returns Calculation Allocation Methods That May Be Used to Determine Whether Fees Paid to Decision Makers or Service Providers Are Variable Interests iv 111 111 112 113 113 116 121 123 124 124 125 127 128 128 129 129 130 Section 5 — Interests in Specified Assets of the VIE and Silo Provisions 5. 01 5. 02 5. 03 5. 04 5. 05 5. 06 5. 07 5. 08 5. 9 Accounting for Interests in Specified Assets and Silos Consideration of Interests in Specified Assets Guarantees That Represent a Variable Interest in the Entity Versus a Variable Interest in Specified Assets of the Entity Considering a Party’s Other Interests in the Analysis of a Variable Interest in Specified Assets of an Entity Considering a Related Party’s Interest in the Analysis of a Variable Interest in Specified Assets of an Entity Determining Whether a Silo Exists Determining Whether a Host Entity Is a VIE When a Silo Exists Determining Whether the Silo Is a VIE If the Host Entity Is a VIE Determining the Primary Beneficiary of the Host Entity and Silo 133 133 135 136 136 137 138 139 140 141 Section 6 — Determination of the Primary Beneficiary 6. 01 6. 02 6. 03 6. 04 6. 05 6. 06 6. 07 6. 08 6. 09 6. 10 6. 11 6. 12 6. 13 6. 14 6. 15 6. 16 6. 17 6. 18 6. 19 6. 20 6. 21 6. 22 6. 23 6. 24 6. 25 6. 26 6. 27 6. 28 6. 9 How a Reporting Entity Applies the VIE Model in ASC 810-10 When It Appears Not to Be the Primary Beneficiary Determining Whether More Than One Reporting Entity Can Consol idate a VIE Risks to Which an Entity Is Designed to Be Exposed Risks and Related Activities Assessing Power to Direct When Decisions Are Made by a Board of Directors and a Manager Consideration of All Risks in the Determination of the Power to Direct Activities of the VIE Evaluating Power to Direct the Most Significant Activities of the VIE in Scenarios Involving a PPA Determination of a Primary Beneficiary for Every VIE Evaluating the Characteristic in ASC 810-10-25-38A(b) Reconsideration of the Primary Beneficiary of a VIE The Effect of Contingencies on Determining the Primary Beneficiary Consideration of Forward Starting Rights in the Primary Beneficiary Analysis Determination of Whether Kickout Rights are Substantive Consideration of a Board of Directors as a Single Party in the Assessment of Kickout Rights Withdrawal and Liquidation Rights Evaluation of Shared Power Versus Multiple Unrelated Parties Performing Different Significant Activities Shared Power Within a Related-Party Group VIEs With No Ongoing Activities That Significantly Affect Their Economic Performance Factors to Consider in the Determination of Whether a Relationship Represents a De Facto Agency Aggregation of Variable Interests When the Reporting Entity Does Not Hold a Variable Interest Directly in the Entity De Facto Agency Relationship When Only Part of an Interest Is Received as a Loan or Contribution From Another Reporting Entity Related-Party Determination — Interests Received as a Loan Considering Whether Restrictions on a Reporting Entity’s Ability to Sell, Transfer, or Encumber Its Interests in a VIE Constitute Constraint The Effect of a Put Option on a De Facto Agency Relationship Consideration of De Facto Agent Requirements in the Determination of the Primary Beneficiary in a Joint Venture Arrangement Determining Which Party in a Related-Party Group Is Most Closely Associated With a VIE Determining the Primary Beneficiary in a Related-Party Group When Members of th e Related-Party Group Are Under Common Control Consideration of the Factors in ASC 810-20 in the Determination of Which Related Party Is Most Closely Associated Application of ASC 810-10-25-38A and ASC 810-10-25-44 When a Fee Paid to an Asset Manager Represents a Variable Interest and the Asset Manager Is Part of a Related-Party Group 42 143 143 144 144 145 147 148 149 149 151 153 155 156 156 157 157 158 159 160 160 162 162 163 164 165 166 166 169 169 170 Related-Party Considerations v Section 7 — Initial Measurement and Subsequent Accounting Initial Measurement 7. 01 7. 02 7. 03 Balance Sheet Classification of Parent’s Interest — Primary Beneficiary and VIE Under Common Control Qualification of an Entity as a Business for Recording Goodwill Upon Consolidation of a VIE Accounting After Initial Measurement — Intercompany Eliminations 173 173 173 174 175 175 Accounting After Initial Measurement Section 8 — Presentation and Disclosures Presentation 8. 01 8. 02 8. 03 8. 04 8. 5 Application of the Presentation Requirements of ASC 810-10-45-25 to a Consolidated VIE Separate Presentation of Certain Assets and Liabilities of Consolidated VIEs Optional Separate Presentation of Certain Assets and Liabilities of Consolidated VIEs Disclosures About Securitizations Under ASC 860 Versus Disclosures About Securitizations Under the VIE Model in ASC 810-10 Definition of Maximum Exposure to Loss for Disclosure Purposes 177 177 177 178 179 179 181 182 Disclosures Section 9 — Transition 9. 01 9. 02 Whether a Reporting Entity Can Elect the FVO for a VIE Upon Adopting ASU 2009-17 Determining VIE and Primary-Beneficiary Status Upon Transition to ASU 2009-17 183 186 186 Appendix A — Implementation Guidance Appendix B — Glossary of Terms and Abbreviations Used in the VIE Model in ASC 810-10 Glossary of Terms Abbreviations 189 205 205 206 Appendix C — Key Differences Between U. S. GAAP and IFRSs — Consolidated Financ ial Statements Appendix D — Reference Guide Appendix E — Glossary of Standards 208 212 214 vi AcknowledgmentsAshley Carpenter, Rob Comerford, Jon Howard, Jeff Nickell, Randall Sogoloff, Joe Ucuzoglu, and Bob Uhl provided the thought leadership necessary to formulate our views on the application of the key principles of Statement 167. James Barker worked with our Energy & Resources practice to develop our views on the application of Statement 167 to power purchase arrangements. Jim Schnurr continues to work with our Investment Management practice to provide input on Statement 167 and the ongoing joint consolidations project. Xihao Hu and Sherif Sakr provided invaluable insight and perspective from our Financial Accounting and Reporting Services group.Joe Renouf, Michael Lorenzo, Lynne Campbell, Yvonne Donnachie, and Joan Meyers delivered the first class production effort that we have come to rely on for all of Deloitte’s publications. Courtney Sachtleben worked t irelessly to ensure this Roadmap was of the highest quality. Her dedication and commitment got this publication to the finish line. Others deserving of mention and appreciation are Robin Kramer, Shan Nemeth, Adrian Schwartz, Kirsten Aunapu, Angela Bacarella, Chris Rogers, Trevor Farber, Catherine Smith, Madhu Gopinath, Shane Burak, Joseph Berry, Kirby Rattenbury, Will Estilo, Chris Toppin, and Thalia Smith. 1 Introduction March 2010 To the clients, friends, and people of Deloitte: Welcome back to the land of variable interest entities (VIEs).It’s been two-and-a-half years since we last updated our Roadmap on consolidation of VIEs, and the consolidations terrain has changed significantly in that time. The most noteworthy changes are (1) the issuance of Statement 167, (2) the release of the FASB Accounting Standards Codification (the â€Å"Codification†), and (3) the continued work of the FASB and IASB on a joint consolidations project. Statement 167 — Whatâ€℠¢s All the Fuss About? In June 2009, the FASB issued Statement 167, which amends the consolidation guidance applicable to VIEs. The Statement 167 amendments are effective as of the first annual reporting period that begins after November 15, 2009, and for interim periods within that first annual reporting period.Statement 167 replaces Interpretation 46(R)’s risks-and-rewards-based quantitative approach to consolidation with a more qualitative approach that requires a reporting entity to have some economic exposure to a VIE along with â€Å"the power to direct the activities that most significantly impact the economic performance of the entity. † The FASB also reminded its constituents that only substantive terms, transactions, and arrangements should affect the accounting conclusions under Statement 167; the SEC has reiterated this principle in numerous public speeches. It’s not surprising that many initially concentrated on understanding how Statement 167 would affect qualifying special-purpose entities (QSPEs) and other structured finance entities because that seemed to be the FASB’s focus, particularly given that six of the nine implementation examples in Statement 167 address structured finance entities.However, the initial adoption of Statement 167 has proved time-consuming because it does not just apply to structured finance entities or entities historically considered VIEs under Interpretation 46(R). In addition, even if a reporting entity determines that it does not need to consolidate a VIE under Statement 167, it must provide extensive disclosures for any VIEs in which it holds a variable interest. In addition to the overall change in the Interpretation 46(R) consolidation model, Statement 167 contains the following significant provisions and amendments: †¢ †¢ ThescopeexemptionforQSPEsisremovedfromInterpretation46(R). Asaresult,transferors,sponsors, and investors in QSPEs need to consider the consolidation and di sclosure provisions in Statement 167.Kickoutrightsandparticipatingrightsareignoredin(1)thedeterminationofwhetheranentityisaVIE and (2) the identification of the VIE’s primary beneficiary, unless the rights are held by a single reporting entity. AreportingentitymustcontinuallyreconsiderwhichvariableinterestholderistheVIE’sprimary beneficiary. Areportingentitymustreconsideranentity’sVIEstatusiftheequityinterestholderslosethepowerfrom the voting rights of those investments to direct the entity’s most significant activities. Anexemptiontothedefactoagentrequirementsexistswhenmutualtransferrestrictionsarebasedon terms mutually agreed to by willing, independent parties. Areportingentitymustmeetsixconditionstodeterminethatfeespaidtoadecisionmakerorservice provider do not represent a variable interest.The FASB believes that fees paid to a reporting entity that acts solely as a fiduciary or agent should typically not represent a variable interest because those fees would typically meet these six conditions. 2 †¢ †¢ †¢ †¢ †¢ Aprimarybeneficiarymustpresentseparately,onthefaceofthebalancesheet,(1)assetsofconsolidated VIEs that can only be used to settle obligations of those VIEs and (2) liabilities of consolidated VIEs for which creditors do not have recourse to the general credit of the primary beneficiary. Powerisonlyconsideredshared(andnopartyconsolidates)if(1)twoormoreunrelatedpartiestogether have the power to direct the VIE’s most significant activities and (2) decisions about those activities require the consent of each of the parties sharing power. †¢To address the new consolidations guidance under Statement 167, this edition of the Roadmap (1) includes over 30 new Q&As and (2) updates our existing Interpretation 46(R) Q&As. The Codification — Do You Have All the New Topics, Subtopics, Sections, Subsections, and Paragraphs Memorized? In July 2009, the Codification became the single source of aut horitative nongovernmental U. S. GAAP. The Codification’s hierarchy is topic, subtopic, section, and paragraph, in that order, each with a numerical designation (e. g. , ASC 810-10-25-37, which was formerly paragraph 6 of Interpretation 46(R)). ASU 2009-17 incorporated Statement 167’s amendments to the VIE model into the Codification. The beginning of each section of this Roadmap contains quotes from the appropriate Codification paragraphs.In addition, for those of you still trying to find your way through the Codification, we thought it would be helpful for each Codification paragraph to be followed by a reference to the corresponding pre-Codification paragraph from Interpretation 46(R), as amended by Statement 167. Although ASC 810-10-55-37 (paragraph B22 of Interpretation 46(R)1) might not roll off your tongue like â€Å"B22 of FIN 46(R)† used to, the Codification is here to stay. However, we suspect that just as there are probably a few accountants who are c linging to their last version of the FASB’s Original Pronouncements (we know you are out there! ), there are some that might need a little help finding the new VIE guidance in the Codification.Accordingly, Appendix D of this Roadmap includes a guide that cross-references the paragraphs from ASC 810-10 to the guidance in Interpretation 46(R), as amended by Statement 167. The reference guide also lists the accounting topic and section from the Roadmap that these paragraph references apply to. (We thought a few hints and a little â€Å"cheat sheet† among friends might be helpful while we all adjust to the new layout of the Codification. ) No More Big Changes Expected Anytime Soon — Right? Well — not really. Did we mention the joint consolidations project that the FASB and the IASB are working on? The IASB and FASB are jointly developing guidance for consolidation of all entities, including entities currently considered VIEs.Although Statement 167 was not dev eloped as part of the joint project, the IASB staff closely followed the FASB’s work on Statement 167. The boards’ goal is to have one consolidation model whose principles are similar to those in Statement 167 and that would apply to all entities. In December 2008, the IASB issued Exposure Draft 10 (ED 10), Consolidated Financial Statements. Although the boards believe that the objectives for assessing control of structures under Statement 167 and ED 10 are fundamentally consistent, they also acknowledged that the guidance in ED 10 can potentially result in different consolidation conclusions — particularly for certain investment funds.The boards are continuing to jointly deliberate several critical issues, including the evaluation of principal and agent relationships, the concept of effective control (e. g. , the ability to control a voting interest entity when a reporting entity holds fewer than half of the voting rights), related parties, disclosures, and pre sentation requirements. The boards have stated their goal to issue an exposure draft during the second quarter of 2010 and a final standard before the end of 2010. We will continue to keep you updated on these developments through our Heads Up newsletters as well as through our Dbriefs webcast series. 2 For a discussion of the current differences between the consolidation models under IFRSs and U. S. GAAP, see Appendix C of this Roadmap. 1 2You see – that’s helpful – isn’t it? If you wish to receive Heads Up and other accounting publications issued by Deloitte’s Accounting Standards and Communications Group, please register at www. deloitte. com/us/subscriptions. Join Dbriefs to receive notifications about future webcasts at www. deloitte. com/us/dbriefs. 3 What’s This I Hear About a Deferral of Statement 167? Can I Get One Too? In February 2010, the FASB issued ASU 2010-10, which amends certain provisions of the VIE model in ASC 810-10. The ASU defers the effective date of Statement 167 for a reporting entity’s interest in certain entities and certain money market mutual funds.It also addresses concerns that the joint consolidation model under development by the FASB and IASB may result in a different consolidation conclusion for asset managers and that an asset manager consolidating certain funds would not necessarily provide useful information to investors. In addition, the ASU amends certain provisions of ASC 810-10-55-37 (paragraph B22 of Interpretation 46(R), as amended by Statement 167) to change how a decision maker or service provider determines whether its fee is a variable interest. This Roadmap reflects the changes to ASC 810-10-55-37. The ASU will defer the application of Statement 167 for a reporting entity’s interest in an entity (1) that has all the attributes of an investment company or (2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies.The deferral does not apply in situations in which a reporting entity has the explicit or implicit obligation to fund losses of an entity that could potentially be significant to the entity. The deferral also does not apply to interests in securitization entities, asset-backed financing entities, or entities formerly considered QSPEs. In addition, the deferral applies to a reporting entity’s interest in an entity that is required to comply with or operate in accordance with requirements similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. These entities will be subject to the deferral even if the money market fund manager has an xplicit or implicit obligation to fund losses of the entity. For reporting entities that meet the deferral conditions, the guidance on VIEs in ASC 810-10 (before the amendments in ASU 2009-17 and the amendments to 810-10-55-37 in ASU 2010- 10) would be used to determine whether (1) the legal entity is a VIE, (2) the reporting entity has a variable interest in a VIE, and (3) the reporting entity is the primary beneficiary of a VIE. However, all reporting entities must provide the disclosures in ASC 81010, as amended by ASU 2009-17, for all VIEs in which they hold a variable interest or for which they are the primary beneficiary — regardless of whether the entity qualifies for the deferral. Q&A 1. 1 of this Roadmap includes a decision tree to help you understand how the deferral may affect which consolidation model you will need to apply. In addition, see our January 27, 2010, Heads Up for information about the ASU’s other significant provisions. The Road Forward We understand that Statement 167 (like Interpretation 46(R) before it) can be a difficult standard to apply — particularly when you are new to its provisions. We believe this Roadmap can help you find your way and can help make the complex sound a little simpler. To those new to VIE land, and to our grizzled VIE veterans, we look forward to working with you. Deloitte & Touche LLP 4 Section 1 — Overview, Background, and Scope ASC 810-10 5-8 The Variable Interest Entities Subsections clarify the application of the General Subsections to certain legal entities in which equity investors do not have sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack any one of the following three characteristics: a. b. c. The power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity’s economic performance The obligation to absorb the expected losses of the legal entity The right to receive the expected residual returns of the legal entity.Paragraph 810-10-10-1 states that consolidated financial statements are usually necessary for a fair presentation if one of the entities in the consolidated group directly or indirectly has a controlling financial interest in the other entities. Paragraph 81010-15-8 states that the usual condition for a controlling financial interest is ownership of a majority voting interest. However, application of the majority voting interest requirement in the General Subsections of this Subtopic to certain types of entities may not identify the party with a controlling financial interest because the controlling financial interest may be achieved through arrangements that do not involve voting interests. Paragraph 1] 05-8A The reporting entity with a variable interest or interests that provide the reporting entity with a controlling financial interest in a variable interest entity (VIE) will have both of the following characteristics: a. b. The power to direct the activities of a VIE that most significantly impact the VIE’s economic performance The obligation to abs orb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. [Paragraph 1A] 05-9 The Variable Interest Entities Subsections explain how to identify VIEs and how to determine when a reporting entity should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements. Transactions involving VIEs are common.Some reporting entities have entered into arrangements using VIEs that appear to be designed to avoid reporting assets and liabilities for which they are responsible, to delay reporting losses that have already been incurred, or to report gains that are illusory. At the same time, many reporting entities have used VIEs for valid business purposes and have properly accounted for those VIEs based on guidance and accepted practice. [Paragraph E5] 05-10 Some relationships between reporting entities and VIEs ar e similar to relationships established by majority voting interests, but VIEs often are arranged without a governing board or with a governing board that has limited ability to make decisions that affect the VIE’s activities.A VIE’s activities may be limited or predetermined by the articles of incorporation, bylaws, partnership agreements, trust agreements, other establishing documents, or contractual agreements between the parties involved with the VIE. A reporting entity implicitly chooses at the time of its investment to accept the activities in which the VIE is permitted to engage. That reporting entity may not need the ability to make decisions if the activities are predetermined or limited in ways the reporting entity chooses to accept. Alternatively, the reporting entity may obtain an ability to make decisions that affect a VIE’s activities through contracts or the VIE’s governing documents. There may be other techniques for protecting a reporting entity’s interests.In any case, the reporting entity may receive benefits similar to those received from a controlling financial interest and be exposed to risks similar to those received from a controlling financial interest without holding a majority voting interest (or without holding any voting interest). [Paragraph E7] The power to direct the activities of a VIE that most significantly impact the entity’s economic performance and the reporting entity’s exposure to the entity’s losses or benefits [Paragraph 14A] are determinants of consolidation in the Variable Interest Entities Subsections. [Paragraph E7] The Variable Interest Entities Subsections also provide guidance on determining whether fees paid to a decision maker or service provider should be considered a variable interest in a VIE. 5 ASC 810-10 (continued) 5-11 VIEs often are created for a single specified purpose, for example, to facilitate securitization, leasing, hedging, research and dev elopment, reinsurance, or other transactions or arrangements. The activities may be predetermined by the documents that establish the VIEs or by contracts or other arrangements between the parties involved. However, those characteristics do not define the scope of the Variable Interest Entities Subsections because other entities may have those same characteristics. The distinction between VIEs and other entities is based on the nature and amount of the equity investment and the rights and obligations of the equity investors. Paragraph E18] 05-12 Because the equity investors in an entity other than a VIE generally absorb losses first, they can be expected to resist arrangements that give other parties the ability to significantly increase their risk or reduce their benefits. Other parties can be expected to align their interests with those of the equity investors, protect their interests contractually, or avoid any involvement with the entity. [Paragraph E19] 05-13 In contrast, eithe r a VIE does not issue voting interests (or other interests with similar rights) or the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support.If a legal entity does not issue voting or similar interests or if the equity investment is insufficient, that legal entity’s activities may be predetermined or decision-making ability is determined contractually. If the total equity investment at risk is not sufficient to permit the legal entity to finance its activities, the parties providing the necessary additional subordinated financial support most likely will not permit an equity investor to make decisions that may be counter to their interests. That means that the usual condition for establishing a controlling financial interest as a majority voting interest does not apply to VIEs. Consequently, a standard that requires ownership of voting stock is not appropriate for such entities . [Paragraph E20] 1. 01 Determining Which Consolidation Model to ApplyUnder ASC 810-10, there are two primary1 models for determining whether consolidation is appropriate: the VIE model and the voting interest model. ASU 2009-17 amends the VIE model and is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, and for interim periods within those reporting periods. ASU 2010-10 indefinitely defers the amendments in ASU 2009-17 for a reporting entity’s interest in certain entities and amends the guidance in paragraph 810-10-55-37 (as amended by ASU 2009-17) on determining whether a decision-maker or service-provider fee represents a variable interest. The deferral will be most applicable to interests in certain investment funds.For reporting entities that meet the deferral conditions, the guidance on VIEs in ASC 810-10 (before the amendments in ASU 2009-17 and the amendments to 810-10-55-37 in ASU 2010- 10) would be used to determine whether the legal entity is a VIE, whether the reporting entity has a variable interest in a VIE, and whether the reporting entity is the primary beneficiary of a VIE. However, all reporting entities must provide the disclosures in ASC 810-10, as amended by ASU 2009-17, for all VIEs in which they hold a variable interest or for which they are the primary beneficiary — regardless of whether the entity qualifies for the deferral. Question How should a reporting entity determine which consolidation model is appropriate under ASC 810-10? 1While ASC 810-10 primarily focuses on the voting interest model and the VIE model, it also discusses consolidation of entities controlled by contract. Although the guidance in the Consolidation of Entities Controlled by Contract subsection applies to all entities (except entities that are determined to be VIEs), the context of the guidance is physician practice management entities. 6 Answer When determining which c onsolidation model to apply, a reporting entity should consider the following flowchart: Does one of the scope exceptions in ASC 810-10-15-12 or 15-17 apply? No Does the potential VIE and the reporting entity’s interest in the potential VIE meet the deferral conditions in ASC 810-10-65-2(aa)?Yes Apply the voting interest model in ASC 810-10. Yes No Does the reporting entity have a variable interest in the potential VIE under ASC 810-10 (before the amendments by ASU 2009-17)? Yes Is the entity a VIE under ASC 81010 (before the amendments by ASU 2009-17)? Yes Determine whether the reporting entity is the primary beneficiary of the VIE under ASC 810-10 (before the amendments by ASU 2009-17). No No No Does the reporting entity have a variable interest in the potential VIE under ASC 810-10 (as amended by ASU 2009-17)? Yes No Is the entity a VIE under ASC 81010 (as amended by ASU 2009-17)? Yes Apply the voting interest model in ASC 810-10 to the entity.Determine whether the reporti ng entity is the primary beneficiary of the VIE under ASC 810-10 (as amended by ASU 2009-17)? Apply the disclosure requirements in ASC 810-10-5 (as amended by ASU 2009-17) for all VIEs in which the reporting entity holds a variable interest, regardless of whether the deferral conditions in ASC 810-10-65-2(aa) are met. If one of the scope exceptions in ASC 810-10-15-12 or 15-17 does not apply to the potential accounting parent or potential accounting subsidiary, determining whether the potential VIE and the reporting entity’s interest in the potential VIE meet the deferral conditions in ASC 810-10-65-2(aa) is the first step in the assessment of whether an entity should be consolidated.Note that this determination is performed first because the analysis of whether the reporting entity has a variable interest in the entity, the entity is a VIE, or the reporting entity is the primary beneficiary may differ depending on whether the potential VIE and the reporting entity’s i nterest in the potential VIE meet the deferral conditions in ASC 810-10-65-2(aa). After a reporting entity determines whether the deferral criteria are met, determining whether an entity is a VIE is the next step in assessing whether an entity should be consolidated. Even a company with wholly owned consolidated subsidiaries must determine whether any of its subsidiaries (as well as any interests it may have in other entities) are VIEs.Note that because of a change in facts and circumstances, a potential VIE and the reporting entity’s interest in a potential VIE that initially met the deferral conditions in ASC 810-10-65-2(aa) may subsequently lose the ability to apply the deferral. In this situation, ASU 2009-17 becomes effective for the potential VIE and the reporting entity’s interest in the potential VIE. If a reporting entity must consolidate an entity that no longer qualifies for the deferral, the assets, liabilities, and noncontrolling interests of the VIE shoul d be measured in accordance with ASC 810-1030-1 through 30-6. Once a reporting entity applies the amendments of ASU 2009-17 to the potential VIE, it cannot subsequently requalify for the deferral conditions in ASC 810-10-65-2(aa). 7 ExampleEnterprise A has 60 percent of the voting interest in Entity B. Enterprise A also receives fees for providing asset management services to B. Unless one of the scope exceptions in ASC 810-10-15-12 and 15-17 applies to A (the potential accounting parent) or B (the potential accounting subsidiary), A must determine (1) whether B, and A’s interest in B, meets the conditions in ASC 810-10-65-2(aa), (2) whether A holds a variable interest or variable interests in B, and (3) whether B is a VIE. Scenario 1: If B, and A’s interest in B, meets the conditions in ASC 810-10-65-2(aa), A must determine whether B is a VIE, as defined in ASC 810-10-15-14 (before the amendments in ASU 2009-17).If A holds a variable interest, as defined in ASC 810-10 -20 and illustrated in ASC 810-10-55-16 through 55-41 (before the amendments in ASU 2009-17), in B and B is a VIE, A should assess whether it is the primary beneficiary in accordance with ASC 810-1025-38 (before the amendments in ASU 2009-17). Enterprise A should also provide the disclosures in ASC 810-10 (as amended by ASU 2009-17). Scenario 2: If B does not meet the conditions in ASC 810-10-65-2(aa), A must determine whether B is a VIE, as defined in ASC 810-10-15-14 (as amended by ASU 2009-17). If A holds a variable interest, as defined in ASC 81010-20 and illustrated in ASC 810-10-55-16 through 55-41 (as amended by ASU 2009-17), in B and B is a VIE, A should assess whether it is the primary beneficiary in accordance with ASC 810-10-25-38A (as amended by ASU 2009-17). Enterprise A should also provide the disclosures in ASC 810-10 (as amended by ASU 2009-17).Scenario 3: If B meets the conditions in ASC 810-10-65-2(aa) but is not a VIE, as defined in ASC 810-10-15-14 (before the am endments by ASU 2009-17), A should apply the voting interest model in ASC 810-10 to B. Scenario 4: If B does not meet the conditions in ASC 810-10-65-2(aa) and is not a VIE, as defined in ASC 810-1015-14 (as amended by ASU 2009-17), A should apply the voting interest model in ASC 810-10 to B. Substantive Terms and Arrangements ASC 810-10 15-13A For purposes of applying the Variable Interest Entities Subsections, only substantive terms, transactions, and arrangements, whether contractual or noncontractual, shall be considered.Any term, transaction, or arrangement shall be disregarded when applying the provisions of the Variable Interest Entities Subsections if the term, transaction, or arrangement does not have a substantive effect on any of the following: a. b. c. A legal entity’s status as a VIE A reporting entity’s power over a VIE A reporting entity’s obligation to absorb losses or its right to receive benefits of the legal entity. [Paragraph 2A] 15-13B Judgm ent, based on consideration of all the facts and circumstances, is needed to distinguish substantive terms, transactions, and arrangements from nonsubstantive terms, transactions, and arrangements. [Paragraph 2A] 1. 02 Consideration of Substantive Terms, Transactions, and Arrangements Question What is meant by â€Å"substantive terms, transactions, and arrangements† in ASC 810-10-15-13A? AnswerIn ASU 2009-17, the FASB added guidance to emphasize that when applying the provisions of the VIE subsections of ASC 810-10, a reporting entity should only consider substantive terms, transactions, and arrangements, whether contractual or noncontractual. The Board thought that it needed to add this language to avoid situations in which the form of an entity may indicate that an entity is not a VIE or that a reporting entity is not a primary beneficiary when the substance of the arrangement may indicate otherwise. Paragraph A35 in the Basis for Conclusions of Statement 167 states, in par t: The Board considered whether additional guidance was needed for determining whether a variable interest holder has power when the economics of the holder’s interest(s) or other involvements is inconsistent with its stated power from such interest(s) or other involvements.The Board agreed that an increased level of skepticism is needed in situations in which an enterprise’s economic interest in a [VIE], including its obligation to absorb losses or its right to receive benefits, is disproportionately greater than its stated power. In the Board’s view, the level of skepticism about an enterprise’s lack of power should increase as the disparity between an enterprise’s economic interest and its power increases. 8 When the provisions of ASC 810-10 (as amended by ASU 2009-17) are applied, the consolidation conclusion should not be affected by any term, transaction, or arrangement that does not truly affect the reporting entity’s power or rights to receive benefits or obligations to absorb losses.A reporting entity should use judgment, based on consideration of all the facts and circumstances, to distinguish substantive terms, transactions, and arrangements from nonsubstantive terms, transactions, and arrangements. To further emphasize this point, the SEC has reminded registrants of the staff’s skepticism about accounting conclusions that do not conform to the economic substance of the arrangement. For example, in remarks regarding the implementation of ASU 2009-17 before the 2009 AICPA National Conference on Current SEC and PCAOB Developments, Arie Wilgenburg, a professional accounting fellow in the SEC’s Office of the Chief Accountant, discussed the following examples: [A]ssume a company has transferred assets to a structure to be managed by a third party, but the anager’s equity interest in the structure is minimal and appears to be guaranteed given the management fee structure. In addition, assume t he manager can be removed by the reporting enterprise if the manager’s performance is unsatisfactory. The combination of the above factors indicates that the company may not have relinquished control; rather the manager may simply be acting as an agent on behalf of the reporting enterprise. We have also seen other, similar structures that include a buy-sell clause rather than a removal right, as a mechanism for dissolving the structure. However, if the manager does not have the financial ability to exercise its rights under the buy-sell provision, the substance of this provision may be a call option by the transferor.Again, this may be an indication that the manager is simply acting as an agent on behalf of the reporting enterprise. At the same conference, James Kroeker, chief accountant in the SEC’s Office of the Chief Accountant, indicated that the staff would consider involving the Division of Enforcement if it becomes aware of arrangements such as those discussed b y Mr. Wilgenburg. Scope and Scope Exceptions ASC 810-10 15-12 a. b. c. d. e. The guidance in this Topic does not apply in any of the following circumstances: An employer shall not consolidate an employee benefit plan subject to the provisions of Topic 712 or 715. [Subparagraph superseded by Accounting Standards Update No. 009-16] [Subparagraph superseded by Accounting Standards Update No. 2009-16] Investments accounted for at fair value in accordance with the specialized accounting guidance in Topic 946 are not subject to consolidation according to the requirements of this Topic. A reporting entity shall not consolidate a governmental organization and shall not consolidate a financing entity established by a governmental organization unless the financing entity meets both of the following conditions: 1. 2. Is not a governmental organization Is used by the business entity in a manner similar to a (VIE) in an effort to circumvent the provisions of the Variable Interest Entities Subsec tions. [Paragraph 4] 5-17 The following exceptions to the Variable Interest Entities Subsections apply to all legal entities in addition to the exceptions listed in paragraph 810-10-15-12: a. Not-for-profit entities (NFPs) are not subject to the Variable Interest Entities Subsections, except that they may be related parties for purposes of applying paragraphs 810-10-25-42 through 25-44. In addition, if an NFP is used by business reporting entities in a manner similar to a VIE in an effort to circumvent the provisions of the Variable Interest Entities Subsections, that NFP shall be subject to the guidance in the Variable Interest Entities Subsections. Separate accounts of life insurance entities as described in Topic 944 are not subject to consolidation according to the requirements of the Variable Interest Entities Subsections.A reporting entity with an interest in a VIE or potential VIE created before December 31, 2003, is not required to apply the guidance in the Variable Interest Entities Subsections to that VIE or legal entity if the reporting entity, after making an exhaustive effort, is unable to obtain the information necessary to do any one of the following: 1. 2. 3. Determine whether the legal entity is a VIE Determine whether the reporting entity is the VIE’s primary beneficiary Perform the accounting required to consolidate the VIE for which it is determined to be the primary beneficiary. b. c. 9 ASC 810-10 (continued) This inability to obtain the necessary information is expected to be infrequent, especially if the reporting entity participated significantly in the design or redesign of the legal entity. The scope exception in this provision applies only as long as the reporting entity continues to be unable to obtain the necessary information.Paragraph 810-10-50-6 requires certain disclosures to be made about interests in VIEs subject to this provision. Paragraphs 810-10-30-7 through 30-9 provide transition guidance for a reporting entity t hat subsequently obtains the information necessary to apply the Variable Interest Entities Subsections to a VIE subject to this exception. d. A legal entity that is deemed to be a business need not be evaluated by a reporting entity to determine if the legal entity is a VIE under the requirements of the Variable Interest Entities Subsections unless any of the following conditions exist (however, for legal entities that are excluded by this provision, other generally accepted accounting principles [GAAP] should be applied): 1.The reporting entity, its related parties (all parties identified in paragraph 810-10-25-43, except for de facto agents under paragraph 810-10-25-43(d)), or both participated significantly in the design or redesign of the legal entity. However, this condition does not apply if the legal entity is an operating joint venture under joint control of the reporting entity and one or more independent parties or a franchisee. The legal entity is designed so that substan tially all of its activities either involve or are conducted on behalf of the reporting entity and its related parties. The reporting entity and its related parties provide more than half of the total of the equity, subordinated debt, and other forms of subordinated financial support to the legal entity based on an analysis of the fair values of the interests in the legal entity.The activities of the legal entity are primarily related to securitizations or other forms of asset-backed financings or single-lessee leasing arrangements. 2. 3. 4. A legal entity that previously was not evaluated to determine if it was a VIE because of this provision need not be evaluated in future periods as long as the legal entity continues to meet the conditions in (d). [Paragraph 4] Overall Scope Considerations 1. 03 Application of the VIE Model in ASC 810-10 to Non-SPEs Question Does the VIE model in ASC 810-10 apply only to SPEs? Answer No. ASC 810-10-15-12 and 15-17 provide scope exceptions for cer tain reporting entities and potential VIEs.Variable interest holders should evaluate all entities that do not fall under these scope exceptions (such entities may include limited partnerships, joint ventures, cooperatives, and trusts) to determine whether they represent VIEs. (For more information about the determination of which consolidation model to apply, see Q&A 1. 01. ) Note that ASU 2009-16 eliminated the scope exception for QSPEs. Therefore, transferors, sponsors, and investors in QSPEs should consider the consolidation and disclosure provisions in ASC 810-10. (For more information about the elimination of the QSPE scope exception, see Q&A 1. 07. ) 1. 04 Qualification of a SPE as a Voting Interest EntityIf an SPE is a VIE, it is subject to consolidation under the VIE model in ASC 810-10. Question Are all SPEs automatically considered VIEs and within the scope of the VIE model in ASC 810-10? Answer No. An SPE can qualify as a voting interest entity and therefore be outside th e scope of the VIE model in ASC 81010. To determine whether the SPE is outside the scope of the VIE model, a reporting entity must evaluate the SPE under ASC 810-10-15-14. To not be a VIE, such an entity must fail to satisfy all conditions in ASC 810-10-15-14. Demonstrating only that an entity possesses one attribute of a voting interest entity, as described in ASC 810-1015-14 (e. g. simply having sufficient equity investment at risk, giving the equity holders voting rights with respect to activities of the entity), is not sufficient evidence that an entity is not a VIE. 10 If an entity is outside the scope of the VIE model in ASC 810-10, it should be considered for consolidation under the voting interest model in ASC 810-10. 1. 05 Application of the VIE Model in ASC 810-10 to Multitiered Legal Entity Structures Question In an ownership structure in which multiple layers of legal entities exist, should a reporting entity apply the VIE model in ASC 810-10 to each of its subsidiaries on a consolidated or nonconsolidated basis? AnswerIn a multitiered legal-entity structure, a reporting entity should generally begin its evaluation at the lowest-level entity. Each entity within the structure should then be evaluated on a consolidated basis. The attributes and variable interests of the underlying consolidated entities become those of the parent company upon consolidation. When a reporting entity applies the VIE model in ASC 810-10 to a consolidated entity, it should analyze the design of the consolidated entity, including an analysis of the risks of the entity, why the entity was created (e. g. , the primary activities of the entity), and the variability the entity was designed to create and pass along to its interest holders (see ASC 810-10-25-21 through 25-36).Note that there are situations in which a reporting entity may â€Å"look through† a holding company and in which it therefore would not be required to examine the structure on a consolidated basis. F or more information, see Q&A 1. 06. Example 1 Two investors each hold 50 percent of the ownership interests in Company H. Company H has 100 percent of the ownership interests in Entity X and consolidates X. Entity X is a business as defined in ASC 805 and represents substantially all of H’s consolidated activities and cash flows. On a nonconsolidated basis, H does not meet the definition of a business in ASC 805. There are no other relationships or agreements between the investors, H, or X.As noted above, the attributes of a consolidated entity become the attributes of the parent company. In this example, X’s attributes become those of H. When the investors are evaluating their ownership interests, they should consider H’s design on a consolidated basis. Because X meets ASC 805’s definition of a business and its activities and cash flows represent substantially all of H’s consolidated activities and cash flows, H also meets ASC 805’s definit ion of a business. Before applying the business scope exception, the investors must first determine whether any of the four conditions in ASC 810-10-1517(d) exist for H’s consolidated activities and cash flows. If so, the business scope exception cannot be applied.A holding company that has ownership interests in a single entity in multitiered structures should also consider the guidance in Q&A 1. 06. Example 2 Two investors each hold 50 percent of the ownership interests in a holding company. The holding company has 100 percent of the ownership interests in Entity E and consolidates E. Entity E meets ASC 805’s definition of a business and represents substantially all of the holding company’s consolidated activities and cash flows. The holding company also consolidates Entity N, which does not meet ASC 805’s definition of a business. Other than its investments in E and N, the holding company has no assets, liabilities, or activities. There are no other re lationships or agreements between the investors, the holding company, E, or N.As in Example 1, the attributes of the consolidated entity become those of the parent company. In this example, the attributes of E and N become those of the holding company. When the investors are evaluating their ownership interests, they should consider the holding company’s design on a consolidated basis. Because substantially all of the holding company’s consolidated activities and cash flows are derived from E, the holding company meets ASC 805’s definition of a business. Before applying the business scope exception, the investors must first determine whether any of the four conditions in ASC 810-10-15-17(d) exist for the holding company’s consolidated activities and cash flows.If so, the business scope exception cannot be applied. 11 Example 3 An investor holds 50 percent of the ownership interests in a holding company. The holding company consolidates the following two e ntities, both of which meet ASC 805’s definition of a business: †¢ †¢ EntityJ,anoperatingentity. EntityL,whoseonlyassetisabuildingthatisleasedtotheinvestor. Entity L’s activities and cash flows represent substantially all of the holding company’s activities and cash flows. Other than its investments in J and L, the holding company has no assets, liabilitie

Alzheimer’s and the effects Essay

Alzheimer’s is a disease of the brain that causes a loss in memory. This results in dementia, loss of brain functions (thinking, remembering, and reasoning) severe enough to interfere with everyday life. When German physician, Alois Alzheimer, first described the disease in 1907, it was thought to be rare. Today, Alzheimer’s disease is the most common cause of dementia, affecting 10% of people 65 years old, and nearly 50% of those age 85 or older. An estimated four million Americans have Alzheimer’s. Alzheimer’s disease usually begins gradually, causing a person to forget recent events and to have difficulty performing familiar tasks. How quickly the disease advances differs from person to person, causing confusion, personality and behavior changes, and impaired judgment. Communication becomes difficult for Alzheimer’s patients. They struggle to find words, finish thoughts, or follow directions. Eventually, people with Alzheimer’s become unab le to care for themselves. Scientists still don’t know what causes the disease. Age and family history are possible risk factors for the disease. Scientists are exploring the role of genetics in the development of Alzheimer’s, studying chromosome 19. Rarer forms of the disease, which happen to people in their 30’s and 40’s, called â€Å"early-onset,† often run within families and appear to be related to chromosome 1, chromosome 14, and chromosome 21. Many researchers and physicians are coming to believe that Alzheimer’s is a complex disease, probably caused by a variety of influences. Alzheimer’s affects both the mental health and Social health. It is mental in the way that Alzheimer’s victims can not think clearly, remember, and reason. Patience can not deal with stress. It is social health in the way that victims can not interact well with people to build satisfying relationships. They can not communicate well with family members or friends. Victim’s may forget who people are. My grandfather Henry B. Harris was diagnosed with Alzheimers when he was about 76 he lived to be 82. During those six years he gradually forgot who members of the family were, even at times he did not remember his wife. About one year before he passed away he was in a nursing home. Knowing that  my grandfather had the disease makes the likelihood that I will have it more probable. Cases where several members of a single family have had been diagnoses with Alzheimer’s disease are rare. Much more common is if a single family member is diagnosed as having probable Alzheimer’s (meaning that physicians are 80 to 90 percent certain that it is Alzheimer’s). A person’s risk of developing the disease seems to be slightly higher if a first-degree relative (brother, sister, parent) has the disease. Perhaps family members were exposed to something in the environment that caused the disease. Everyone has forgotten where they parked the car or the name of an acquaintance at one time or another. And many healthy individuals are less able to remember certain kinds of information as they get older. The symptoms of Alzheimer’s disease are much more severe than such simple memory lapses. Alzheimer symptoms affect communication, learning, thinking, reasoning, and can have an impact on a person’s work and social life.

Survivor’s Quest

For any of them to survive on a remote island, they would have to have the physical capacity to endure the harshness of the wilderness. They should also have the mental and emotional maturity to know when and how to help out and not be a burden to their group. They would have to learn how to live away from their comfort zone. The first best choice would be Father Franz, and not merely because he is a priest. He has the physical strength to live in that kind of environment and he has a farming background which will be of great help in terms of a sustainable food production for the group. He would also be a good candidate to be the leader of the group and again, not just because he is a priest, but because of his being active in civil rights guarantees that he will be just and fair in relating with his islandmates. His being liberal also guarantees that his judgments will always be towards the good of them all; not restricted by religious his biases. His being a priest however makes him a better moral uplifter for them the survivors. The next good choice would be Mr. Blake. He is an outdoors man so his knowledge and skills would be essential for their survival. His construction experience will also become handy in making a shelter for them. His prejudices against blacks however might become a problem for them. Dr. Gonzalez may be an experienced doctor, a skill that would be of great value to all of them in the island. However, he is old, and has already lived a full life. Mr. Newton on the other hand, still has one year to finish in med school. What he has learned in school cannot compare to what Dr. Gonzalez has learned through years of medical practice. However, he is young and can still keep on learning. Provided that he did his homework back in school, what he has learned should be enough for him to be able to treat any ailments and injuries his co-survivors might acquire while they are at the island. He will suddenly be able to put what he has learned in practice. Therefore, Mr. Newton should be allowed on the boat. The two children: Jean Garcia and Bobby Dane should also be allowed on the boat. They are very young and should have the privilege to experience life. But at their age, for them to survive on the island, they would need their parents to nurture them. It was not indicated specifically whether Mrs. Garcia is indeed Jean’s mother. Assuming that she is, she might not have much to present in terms of intelligence and regarding her past, unlike most of the other candidates who has many achievements to enumerate, but she is Jean’s mother, therefore she should be given the chance to raise her child the way she sees fit. Bobby on the other hand is a special case. His condition requires someone to take care of unconditionally him in long terms. That role would be best fulfilled by his parents. His mother should be the best candidate for that. However, she is diabetic. Her condition makes her very fragile especially in a remote island where she would not receive her proper treatment. She might not live long enough to take care of her son. Therefore his father, Dr. Dane should be allowed on the boat instead. He is physically healthy to live long enough to care for Bobby. For such a varied group of people to survive and live together on a remote island, they should all be matured enough to disregard their religious and racial ideologies. They should learn to work and cooperate with each other in order to live harmoniously.

Angostura Aromatic Bitters’ marketing plan Essay

1. Executive Summary 1.1 Synopsis of the Situation The history of Angostura aromatic bitters approaches the year of 1822, when a cholera epidemic whipped the population of Angostura in Venezuela, when the young doctor Johann Gottlieb Benjamin Siegert created a somewhat bitter medicine, quite unusual taste, but of proven volatilities effectively relieve the stomach of his many patients. This potion was composed of over 25 botanicals in abundant natural reserves of these tropical lands, including fruits, roots, herbs seeds, bark, and a  good amount of ingredients whose name and proportion remain, even today, in the strictest secrecy. In 1830 a distillery installed and did not take long to become famous on the continent, winning the gold medal at the World Exhibition in Vienna in 1873. After the death of Siegert in 1870, the family moved in 1875 to Trinidad and Tobago where there continues today making the Angostura aromatic bitters, preserving their behalf to keep the Venezuelan source most of their inputs to date, as well as also the peculiar label in four languages and signature of its inventor, who since then characterizes it. Its initial use was to relieve some stomach ailments. But some additional benefits subsequently discovered is that the strengthened the taste of certain foods and cocktails preparations, which made time disappear from kits home and hospital to become a common ingredient in bars and kitchens around the world . Today is a precious ingredient in the preparation of cocktails and is also used as a seasoning for soups and sauces. Drops of Angostura aromatic bitters is sold in small bottles of 100 cc and 200 cc, the most famous and popular brand Angostura aromatic bitters. Usually drops in drinks (G & T, Mojito, Cuba Libre, Pisco sour), classic cocktails like the Manhattan, Champagne Cocktail, etc. used and refreshments as LLB – (Lemon Lime & Bitters) or â€Å"Fantasia† Rock Shandy, The Chapman, The Gunner. Currently in the Colombian market there is not drop bitters, there are national essences bitter which are manufactured by CONDICOM and Productos El Bosque, which make the basic condiments for cooking. These national essences bitter have an alcohol content of 3 degrees, which makes you need to use a larger amount of product per cocktail or preparation, unlike drops Angostura aromatic bitters which have an alcohol content of 44.7 degrees making them stronger and with 2 or 3 drops per cocktail is enough to make the mixture,  not only because of its alcohol content but the strong flavor of the merged its ingredients. The category of biters brings sustainable growth in the global market of 4.7% in the last 5 years (Source: International Wine & Spirit Research). Angostura is still the leader in this category of bitter. 1.2 Key aspects of the marketing plan We want to be the exclusive distributor of Angostura aromatic bitters in Colombia. For this reason, we have to import the product, market and build brand image of â€Å"Drops of Angostura aromatic bitters† in the country. Also, position the product as a reference category. The key factors of this marketing plan are: Comply with the requirements of law, such as trademark registration and authorization. The trademark registration protects the producer (trademark owner) against any misuse of it by a third; this register is valid for 10 years. The health record is the guarantee that emits a government institution, which certifies that a product is fit for human consumption. Segment drops Angostura aromatic bitters into two distribution channels, which would be the ON-PREMISE (hotels, restaurants, coffee shops and bars) and OFF-PREMISE big retail channel. Define the cities in which the product and the strategic trade partners (sub-distributors) through which will be sell. Define the selling price to the various distribution channels which through which we will reach the consumer. Develop activities that generate image and brand recall, such as trainings, competitions of cocktails, sponsor cocktails menu, accompanied by free-press training in each activity. 2. Environmental analysis Colombia is a country with a population of 48,321,405 people (2013 estimates, source: DANE), it is in the 28th position in the table of population composed of 183 countries and has a moderate population density of 42 inhabitants per km2. At 2013 the Gross Domestic Product (GDP) in Colombia recorded an increase of  4.9%, according to data provided by the DANE. Investment and consumption showed a great performance. The sectors driving growth in 2013 were: mining and quarrying (4.9%); electricity, gas and water city (4.9%); financial institutions, insurance, real estate and business services (4.6%); trade, repair services, restaurants and hotels (4.3%); Transport, storage and communication (3.1%). Source: http://es.tradingeconomics.com/colombia/gdp Colombia is the fastest growing economy in Latin America, surpassing the Pacific Alliance (Colombia, Chile, Peru and Mexico). In turn, the country ranked 15th in growth in a sample of 75 nations. Source: world bank The unemployment rate in Colombia in 2013 on an urban scale, in the 13 largest cities is 8.7 percent, the lowest since 1995. The investment rate, the percentage of GDP that the country reinvests, reached 28.4%, the highest in half a century and the second in the region. Another important fact is that the force that is moving the economy is internal. Government consumption is growing at rates of 5.7% and 4% households. Within the household consumption stand purchases of durable goods, which accelerated during the third quarter of this has to do with the better performance of income and a higher level of confidence. As for imported spirits market figures in Colombia by categories to December 2013 in boxes of 12 bottles 9 liters each one, are: Alcoholic beverage Number boxes Whisky 403,189 Vodka 66,195 Gin 20,578 Brandy and cognac 1,532 Ron 205,518 Tequila 58,413 Wine 1,178,758 2.1 Strengths and weaknesses Strengths: Recognized as #1 in the world (large gap vs. competition). High concentration and high level of alcohol, making the product more efficient. Strong price position (inelastic). Rich in heritage and legacy (royal warrant). The product is nonperishable. Angostura will continue to make a consistently high quality product that will make people’s food and drink recipes come alive. Angostura train people in the classics, as well, as the cutting edge to make them better bartenders and cooks. Angostura will no longer see itself as traditional and old-fashioned, Angostura will exhibit flare, passion and attitude, and inject a little more irreverence. In ten years from now Angostura aromatic bitters will revolutionize the cocktail industry again and Angostura will be as popular a food ingredient as Lee & Perrin’s. Angostura is one of the most iconic brands in the world. The rich, dark and mysterious liquid adds a distinguishable color and taste to all its creations (adding color and flavor to life). Weaknesses: Low visibility at point of sale (especially ON-PREMISE channel). Consumption tax payable by the category, increasing the price. 2.2 Opportunities and threats Opportunities: Currently in Colombia the food industry (food and drink) is booming, a growth in recent years and still considered one of the 4 most important gastronomic destinations in Latin America. There is no category of bitter in Colombia and would be the first brand in this category, entering with the most recognized brand in the world. Partnerships with other major spirit brands. Partnership with Pernod Ricard and Monin. Improvements made into accessing new markets. Partnership with Bartender Guilds and Associations (The Golden Service, BAR) and schools of mixology. Slow food to capitalize on opportunity.   Currently the non-alcohol cocktails are booming. Threats: In Colombia the regulation of alcohol consumption is very strong. Financial monopoly, departments control the marketing of alcoholic beverages within its territory, to authorize or prohibit the entry of such products. Changing landscape of tax structure. Parallel Trade. Currently in Colombia there are two national brands of â€Å"essences† of bitter, which are CONDICOM and Productos el Bosque. In the future when the category of bitter â€Å"drops† will be develop; international brands reach (Fees Brothers, Bitter truth, Peychaud’s, Bitter Cube, Bittermen’s). This kind product does not enough known in the Colombian market. 2.3 Current objectives and performance The current objectives are: Enter the brand in Colombia. Develop nonexistent bitters category. Create image and brand awareness to achieve the referent category in Colombia. The performance of the marketing plan will be described in the following sections. 2.4 Five forces’ Porter analysis Threat of New Entrants: Capital, economic muscle, expertise, brand, regulation, taxes. Power of Suppliers: The Angostura aromatic bitters’ business in Colombia has only one supplier who is the company who made the product. For this reason, the supplier is extremely susceptible to the demands and requirements of the market and hold very high power. Power of Buyers: The consumers of cocktails and food in Colombia are very price sensitive, but they want to taste new flavors and they are very susceptible to trends. Availability of Substitutes: The bitters drops have no substitutes, as a unique flavor enhancer with the ability to marry flavors in the preparation of all food dishes. Competitive Rivalry: the market of bitters in Colombia has two local brand competitors, but they are not concentrated bitters (drops), they are essences. 3. Marketing Strategy 3.1 Segmentation As we mentioned above, Angostura Aromatic Bitters are used to be added to the cocktails and food to create new possibilities of flavor and a whole range of new and exclusive beverages and dishes. Due to the Angostura Aromatic Bitters’ conditions as an alcoholic beverage for the Colombian market (according with the requirements from INVIMA), Angostura Aromatic Bitters has to pay a special tax. For that reason, the price is higher than the Colombian competitors. Angostura Aromatic Bitters’ segmentation is defined in the two next tables related with the consumer and business markets: Segmentation variables for Angostura Aromatic Bitters’ consumer markets Geographic region South, north, and central Colombian areas City Bogotà ¡, Cali, Medellà ­n, Barranquilla, Cartagena, Santa Marta, Pereira, Manizales, Bucaramanga Density Urban Demographic age Above 18 Gender Male and female Religion All. The product has a kosher certification Social class Middle, upper middle and upper classes Behavioral occasions Regular and special occasions Segmentation variables for Angostura Aromatic Bitters’ business markets Demographic Hotels, restaurants, bars, coffee shops It does not matter the size Located in major cities in Colombia Operating variables Customer who use to drink cocktails and gastronomy Purchasing approaches Hotels, restaurants, bars and coffee shops who wants to be different, to supply a different and new cocktails age, to offer to their customers a high quality alcohol and non-alcohol beverages. Situational factors We focus either on large or small orders Personal characteristics We want to serve whatever hotels, restaurants, bars and coffee shops (ON PREMISE) and big retailers (OFF-PREMISE) 3.2 Target Market According with the segmentation, the Angostura Aromatic Bitters ´ targets are  the main and representative hotels, restaurants, coffee shops and bars, from the main Colombian cities, who serves the middle, upper middle and upper classes of the population who are above 18 years (the minimum Colombian age to be permitted to a people to drink an alcohol beverage). 3.3 Positioning (Value Proposition) Angostura Aromatic Bitters will position itself as the premier and unique enhanced flavor to non-alcohol and alcohol cocktail and food. This positioning will be achieved by leveraging Angostura Aromatic Bitters’ competitive edge: industry experience, innovation possibility and high quality. Angostura Aromatic Bitters is a high quality product produced for people who wants to have a new flavor experience related with a non-alcohol and alcohol beverages (new cocktails age) and food. The Angostura Aromatic Bitters’ company is able to use its vast experience and personal passion to create a high quality product to develop innovative and new flavored food and cocktails, for the whole cocktails drinkers and people who want to live a new experience about their food. 4. Marketing Programs 4.1 Product Respected and recognized as the leader in aromatic bitters worldwide; no bar or kitchen is complete without it. Angostura Aromatic Bitters is a high quality product produced from alcohol and many others aromatic plants. Unique flavor enhancer (seasoning) for the preparation of alcoholic and non-alcoholic beverages, as well as, any savory or sweet food dishes. Sodium and Gluten-Free. Exported to 150 countries worldwide. Kosher Certified. Tempers the acidity of citrus ingredients for individuals who are acid sensitive (also explains why Angostura aromatic bitters can settle the stomach). Classified as a food ingredient in many countries (in Colombia is  classified as an alcohol beverage). Although the product contains 44.7% alcohol by volume, each drop contains an insignificant amount of alcohol and therefore remains non-alcoholic. 100% Vegan. Because is more concentrated than the competition product, Angostura aromatic bitters yields more and their cost – benefit relationship is higher. Through these features, we want to develop and add value to the Angostura Aromatic Bitters’ consumers and the brand, in order to be successful in Colombia as the product has had successfully in the world. The price of the Angostura Aromatic Bitters make possible to generate revenues to all the different actors involved in the production and distribution chain. 4.2 Pricing Although the price of the Angostura Aromatic Bitters is higher than the Colombian competence, because of the taxes and importation costs, their cost – benefit relationship is higher: Product Volume per bottle Alcohol by volume Drops per bottle Drops per cocktail Cocktails per bottle USD per botle USD per cocktail Angostura aromatic bitters 100 cm3 44.7% 180 2 90 11.4 0.13 Colombian essences bitters 148 cm3 3% 266.4 15 18 5 0.28 The product price is favorable for the dealers allowing them to have a very attractive profit margin: 100 cm3 bottle USD Revenues % of price Selling Price from producer to distributor 3.6 Distributor final price after import and taxes 4.5 0.9 25% Selling price distributor to allied distributors 8.2 3.7 82% Selling price allied distributors to final consumer 11.4 3.2 39% 4.3 Promotion Use the original Angostura aromatic bitters’ webpage to show what the product is and several recipes. Create a viral marketing using Facebook, Twitter, Instagram, Pinterest to show the product. Using the mixologist’s network to develop the brand and product’s uses. Create Youtube videos in order to massify the recipes that used the Angostura aromatic bitters. Create  cellular phones applications (android and iphone) to widespread the access to the people to the product and its uses. Make a cross marketing between hotels, bars, coffee shops and restaurants and all the places where the product will sell, in order to the people knows the benefits and they can learn how they can use the Angostura aromatic bitters. Create contests in each city to involve consumers highlighting their creativity to make new cocktails using Angostura aromatic bitters. The bars, hotels, coffee shops and restaurants would make the winner’s cocktail available, on drinks menu for duration of contest, the winners will be adjudged via customer sales for cocktail. The winners will participate in a national contest to be the Colombian winner and take the chance to go to the â€Å"Legends of the Cocktail† World Tour. Create learning and e-learning courses to teach people the uses of the product. Involve the use of the product in TV specialized food and beverage shows (free-press). Make free samples to the launch time, in order to distribute it across the main restaurants, hotels, coffee shops and bars in each main city of Colombia, to create product recognition. Through these ways of promoting the Angostura aromatic bitters, we want to get consumers massively to become familiar with the product and its uses. 4.4 Distribution The Angostura aromatic bitters will have the next logistics to make the distribution: 1. The company sells us the product directly from their manufacturing plant located at Trinidad and Tobago. 2. We import the product to our warehouse located in Cali – Colombia. 3. We will have one distributor for each main city in Colombia. 4. The selling will be doing by internet, by phone and by visit directly to the client. The dispatching will be centralized from our main warehouse and with the application system help, the product will be send to each regional distributor in order to be dispatched to each client. 5. The main clients will be the restaurants, hotels, coffee shops and bars located in middle and high income areas of each mains Colombian cities. 6. We will sell the product in selected big retail chains and in wine and spirits specialized stores. 5. Evaluation and control 5.1 Performance measures Our strategic objectives are: Expand the distribution by placing products in: 50 retail stores (OFF-PREMISE) 15 wine and spirits specialized stores (OFF-PREMISE) 1,400 on the ON-PREMISE nationwide. Sale of 80% of first import at year 2015 (4,896 bottles during the year). We will evaluate our marketing plan according with this metrics, also external and internal: External metrics Metric Measure Market share per volume Angostura aromatic bitter volume of bottles sold versus total bottles of essences bitters sold Market share per value Angostura aromatic bitter total USD sold versus total USD of essences bitters sold Market share per customers Angostura aromatic bitter total customers versus total bitters’ customers Consumer satisfaction Surveys results from 90% of total Angostura aromatic bitter’ customer (hotels, restaurants, bars) Loyalty Percentage of customers who changed to the competitors Distribution Percentage of customers who received on time and full the deliver Learning Number of courses dictated Internal metrics Metric Measure Financial goals Percentage of financial goals accomplish by period Employee satisfaction Internal survey results Skill levels Knowledge about the product and its uses Learning Number of new learning and e-learning course created. Recipes Number of new recipes created. 5.2 Evaluation procedures The evaluation procedures we will do to do the performance measures are: Surveys Direct customer and channels control visits Statistical beverages consumer Statistical sells Statistics presence of the product in customers.

Confucius and Aristotle on Virtue Essay Example | Topics and Well Written Essays - 500 words

Confucius and Aristotle on Virtue - Essay Example Confucius and Aristotle on Virtue Similarly, the essay suggests ideas of virtue, which can apply to ethics in the contemporary society that has diverse workplaces. According to the concept of ‘virtue ethics’ by Aristotle, it is challenging to attain morality in a universal code. That indicates that the justified thing to do in a specific situation is what a virtuous individual would do. Aristotle defines virtue as the quality of character that is essential and ideal in ensuring a life well lived. In defining this concept, Aristotle focused on characterizing the good life as that lived under the influence of or in accordance with virtue. On the other hand, Confucius focused on going a notch higher to the process of defining the concept with the intention of escaping the potential circularity of virtue ethics. He further provided a starting point towards understanding how to achieve a good life. From that perspective, there is not a single, universal moral code. Nevertheless, there is a ‘root of humanity’ and, thus, the perfect opportunity for the attainment of closest loving relationships. Similar to most Greek philosophers, Aristotle focused on viewing virtue as a form of language. From that perspective, self-examination is essential in the generation of self-knowledge that eventually leads to the realisation of the good life. It indicates that knowledge comes out as a mean, which is relative to individuals. In Nicomachean Ethics, Aristotle focused on the integration of a patient, careful and descriptive approach to examining moral philosophy.