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Gains from the Process of Globalization - Assignment Example

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The paper "Gains from the Process of Globalization" states that it is, therefore, clear that those who lose in the unequal world of today are not those who have a lot of participation in the globalization process but are those people or countries that have been left out of the process…
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Gains from the Process of Globalization
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International finance Q Introduction Criticisms have pointed out the various part of the world that have experienced very little gains from the process of globalization and has pointed it vividly as the globalization failure. It is therefore clear that those who lose in very unequal world of today are no those who have a lot of participation in the globalization process but are those people or countries that have been left out of the process. It is beyond doubt the benefits and burden of the process of globalization and the economic development has not bee shared equally and fairly (Wang & Zhang, 2014). In the rich countries those who share in the view that the process of globalization is very unfair are more likely to complain the process of globalization is spreading and growing at a faster rate. In contrast, for the third world countries those who share in the view of unfairness are more likely to say the process of globalization is taking to long and is proceeding slowly. This paper seeks to analyze and determine whether the global standard are not only achievable but are also inevitable consequence of continued globalization. A perennial challenge facing all of the worlds countries, regardless of their level of economic development, is achieving financial stability, economic growth, and higher living standards. There are many different paths that can be taken to achieve these objectives, and every countrys path will be different given the distinctive nature of national economies and political systems. The ingredients contributing to Chinas high growth rate over the past two decades have, for example, been very different from those that have contributed to high growth in countries as varied as Malaysia and Malta. For along time a major challenge that has been facing the world’s countries irrespective of the level of their economic growth and development is how to attain financial stability so that they can they can increase the living standards for their citizens, and economic growth Economic globalization is an ever increasing integration of the economies all over the world especially through the movements of goods and services from one place to another and even the capital across the border of various countries. This term economic globalization is more of a historical process that follows human innovations and development of the technological processes. It may also mean movement of the human labor and technological knowledge in the international border markets as it carries with it broader political, cultural and even environmental aspects. The term globalization has been used for a long time to reflect or indicate technological advances that has contributed to make it easier and faster to complete transactions in the international markets for example carrying out trade ands even the financial flows. It goes beyond national borders that operate in the same market forces and are characterized by the human economic activities. Some of the indicators that show how both capital goods and even the people have become globalized are as outlined: there is percentage increase of the GDP of the whole world as a result of trading in both goods and services, growth of the foreign direct investment as a factor of the GDP of the world, percentage increase of the GDP of the world as a result of the stock of the international claims especially the bank loans and percentage increase of the world populations that are working in the foreign markets. Evidence show that citizens of countries from different regions and are of different sizes experience benefits of different forms starting from varieties of goods and services, lower prices of commodities, better and well paying jobs that contribute to higher living standards. It is very important to note that as different countries become more open to global forces, the number of their citizens that are living in extreme poverty reduces significantly. With the emergence of the global markets, efficiency has improved in many countries this mainly because of the competition and the division of labor that allow the countries to specialize in what they are best at doing. Global markets also enable different countries to get the opportunities of tapping into more diversified markets. This would mean that different countries can easily access more capital, technological expertise from different countries, cheaper import costs and even access to larger export markets. Globalization and the decline in power of the national governments Not only has the individual institution felt the effect of the delocalization but the major causality of this action is the fall in the power of the national governments of different countries to directly influence their economies particular with respect to the management of the microeconomics. Changes in economic activities of countries such as the United States are largely felt by many countries throughout the world, this mainly because internalization of the financial markets and the technological knowhow that is used in many countries to manufacture certain goods comes with anew set of limitations on the freedom of action of such countries. Globalization in terms of the delocalization In the current world a new economy should come up that is characterized by some new brands of capitalism that is made up of the following key features: one, productivity and the competitiveness which is consider as a function of some knowledge that is generated through processing of information which enable fi5rms to be organized a long the networks of production, management and distribution of their products. Many of the activities that were dependent on face to face interactions are now conducted across many miles a way this is because of the de-localization of both social and economic exchanges. A lot of factors seem to under pin prosperity of many countries for example the spread of technology, investment especially the foreign direct investment and even sound microeconomic policies. Common base that tries to link most of the countries is stronger institutions that recognize the importance of the skilled labor force and the participation in the global economy. International trade and the globalization A key element of globalization is the growth and expansion of the business in the international markets through removal of the trade barriers for example imports tariffs. Greater imports provide opportunities to consumers to access and chose from a wider variety of goods and services that are offered at a lower price as they provide stronger incentives for the local industries to remain very competitive. On the other hand export is also viewed as a source of stronger economic growth for the developing countries since it provides incentives to create jobs because industries can do business beyond their boundaries. More importantly trade promotes national competitiveness through making the workers to mainly focus on those vocations in which they and their nations have competitive advantage over other nations. In addition trade also promotes economic flexibility and even resilience where there is greater import that can be used to offset domestic supplies that could be shocking. High degree of openness can also promote the foreign investors to invest hence providing a very good source of employment for the local people and may bring with it new technologies that can be used to enhance productivity of a country. Globalization, poverty and income inequality Many countries that have embraced globalization have their work force experiencing a greater income increase and for those countries that ignored and rejected it have fallen behind in terms of the income that is received. The same phenomenon is true at work places within the countries where some people have become exceptionally bigger beneficiaries of the process of globalization the others. Over some few years some regions and countries have experienced a rise in the income inequalities while at the same time income per capita of those countries have virtually raised for even the poorest section of the population. This has a meaning that the poor is seen as being better off in absolute terms during this period of globalization when the income for the relatively seen as being well off have increased rapidly. Consumption patterns of different groups from developing countries show that there is a serious inequality in terms of income that exists between the richest and the poorest in populations across different parts of the world. It is more important that the gains that are associated with globalization are equally share among and across the whole population of the world. Because of this reason there is need for reforms that are to strengthen training and education of the workers to have the knowledge and skills that is needed in the global economy. Policies that will widen financial access for the poor will also be of importance since this will help to further trade liberalization of the trade that will eventually boost liberalization of agricultural exports from the third world countries (Vasudev, 2014). In addition, some programs that would see to it that there is adequate income support to developing countries but not to obstruct the change process. The program mush ensure that the health care programs are made to be less dependent on continued employment of the people and also increasing the transferability of the pension benefits in many countries. Globalization should therefore not be rejected since its influence has made some people jobless and the dislocation may be a factor of several forces that have very little effect to do with the globalization and more to do with the inevitable technological change processes. Future of the process of globalization At the present time the question that is commonly asked is not whether the process of globalization will continue but the pace at which it will be moving. Several sets of factors will determine the future bearing of the process of globalization but most important factor that should not be overlooked will be the sovereignty of the governments. They can play a very significant role in erecting obstacles to the process of globalization through establishing a lot of trade restriction for example imposing very huge trade tariffs, immigration restrictions and even cause military hostilities. The global economy should operate freely and in open environment where goods and services and even the people are able to move freely across the boundaries of other countries without any fear or difficulty. The countries should learn to avoid fragmentation that may cause breakdown of the existing cooperation among different countries this is simply because the world is still composed of the nation states and the international market places. Right rules should be put in place so that the global system is made to be more resilient and beneficial to the people of different countries. Q 2 Intangible assets Intangible asset refers to a set of an identifiable non-monetary business resource without any physical substance (Struthers, 2005). On the other hand assets are business resources that are controlled as an entity resulting from the past event for example things like purchasing or self-creation and from which the future economic benefits such as the cash inflows are expected to come. Example of intangible assets are thing like the software of the computers, trademarks, patented technologies, internet domains and even the video and audio visual materials. Intangible assets can be acquired by the business as part of the separate purchase of business combination, through government grants, and even through the exchange of the assets by self-creation. Recognition of the intangible assets The criteria that are used in the recognition of the intangible assets require that an entity is to recognize an intangible asset whether they are purchased or they are self-created. It is therefore most probable that the future economic benefits that may be attributed to the assets will have to follow to the requirements of the entity and also allow the cost of the asset to be measured in reliable terms. This kind of the requirement is used and applied whether the intangible asset is acquired externally or they are generated internally. Another recognition criteria for the internally generated assets involves looking at the probability of the future economic benefits that must be based on the reasonable and the assumptions that can be supported by the conditions that will exist as long as the asset exist. This criterion of the probability recognition is always considered to be met when the intangible asset are acquired separately or are in the combinations of the business (Saxonhouse & Stern, 2005). For the cases when the recognition criterion is not met, then the intangible assets are considered not to have met the description and the criteria to be called an intangible asset. Therefore it is then required that the expenditure on those items to be recognized by the business when they are incurred. There is always a presumption that the fair value that is the cost of the item of an intangible asset that is acquired in a business combination can be reliably measured (Liston & McNeil, 2013). An expenditure that is inclusive of the acquisition of the intangible asset that does not met the requirement of the definition and of the recognition criteria for an intangible item should the be considered to form part of the amount that is attributed to the recognized goodwill at the date when the item was acquired. The set standards also prohibit business entity that is subsequently reinstated as an intangible asset at a future date of an expenditure that was charged originally to the expenses. Initial recognition These are the research and development costs that are charged on the research cost to expense (El-Said & Harrigan, 2006). The cost that are used for the developments are only capitalized only after the technical and business feasibility of the assets that are meant for sale or its use has been established. This has a meaning that this feasible entity must intent to and be able to complete the requirenments of the intangible assets and is either used it or sold it so that they can be able to show how the assets will be able to generate future economic benefits. If an entity has indicated that it cannot help to distinguish research phase of projects that are carried out internally, so that the intangible assets can be created from the phase of the development. The threats that are associated to the entity expenditure for that project is treated as if it were in the research phase only. Initial recognition especially in-process research and development that is acquired in business combinations are given recognition as an asset at the cost even if one of the components is a research. The following subsequent expenditure on that project is therefore accounted for as an expenditure of any other research and development. Brands, publishing titles, lists of the customers and any other item that is related in nature of the substance that is generated internally should whatsoever be recognized as an intangible assets. Initial recognition of the computer software Capitalized operating system for the hardware that is purchased must be included in the cost of the hardware that is internally developed which can either be for sale or for use. Initial measurements Intangible assets are initially measured at cost where the entity must decide to choose either the cost model or the revaluation model that can be used for each class of the intangible assets. After the initial recognition of the intangible assets should then be carried out at a cost that is less than the cost of amortization that is accumulated and even the impairment losses (Oseni, 2013). For the case of the revaluation model, the intangible assets can be revalued that is based on the fair value that is slightly less than any subsequent amortization and the losses of impairment only and only if the fair value can be determined through reference to the active markets. Such active markets may not be common for the intangible assets and they may only exist in the production quotas, fishing licenses and even in the taxi licenses. Revaluation model increases the recognition in a comprehensive income that is accumulated in the surplus of the revaluation that is within the base of equity except for the case that it reverses a revaluation decrease that was previously recognized in profit and loss accounts. Measurement that is subsequent to acquisition that is the intangible assets with finite lives The cost that is less than the residual value of the item with a finite useful life should be systematically amortized over the life cycle of that item. The process of amortization should be the one that reflects the pattern of how accrued benefits are achieved. If this pattern cannot be established and determined reliably then the most suitable method that can be used to determined amortization is the straight line method. The cost of the amortization is recognized when the business is making a loss or profits not unless another IFRS requires that it is include on the cost that is associated with another asset. Measurement of subsequent acquisition of the intangible asset with indefinite useful life Intangible assets that have an indefinite useful life should not pass through the process of amortization. It is therefore recommended that the useful life for these intangible assets to be reviewed in each and every reporting period so as to determine if circumstances and events can still support and indefinite useful life assessment for that particular asset (Grubb, 2011). If they do not measure to the expectations the change in the useful life is necessary from the indefinite to finite so that it can be accounted for changes in accounting estimates. As a result of the nature of the intangible asset, subsequent expenditures that are incurred will not popularly meet the set criteria that can enable it to be recognized when determining the carrying amount of the assets. However subsequent expenditures on brands, publishing titles and even the customer lists with the same items must always be recognized as they are incurred as the profit or loss. Q 3 Non-current asset value $000 Cost of the machine 500 Add import duty 200 Add employee cost 100 Add direct overhead cost 400 Add dismantling fee 250 Add legal fee 200 Non-current asset value 6150 Useful life of the machine 4 years Discount rate 10% Depreciation = (0.1)4x 6150000 =$ 615 Bibliography El-Said, H. & Harrigan, J. 2006, "Globalization, International Finance, and Political Islam in the Arab World", The Middle East Journal, vol. 60, no. 3, pp. 444-466 Grubb, M. 2011, "International climate finance from border carbon cost levelling", Climate Policy, vol. 11, no. 3, pp. 1050-1057. Liston, D.P. & McNeil, L. 2013, "The impact of trade finance on international trade: does financial development matter?", Research in Business and Economics Journal, vol. 8, pp. 1-19. Oseni, U. 2013, "Towards restructuring the legal framework for payment system in international Islamic trade finance", Journal of International Trade Law & Policy, vol. 12, no. 2, pp. 108-129. Saxonhouse, G.R. & Stern, R.M. 2005, "Reversal of fortune: Macroeconomic policy, International Finance, and Banking in Japan", International Economics and Economic Policy, vol. 2, no. 2-3, pp. 91-100. Struthers, J. 2005, "International Competitiveness, Investment and Finance: A Case Study of India, by A. Ganesh-Kumar, Kunal Sen and Rajendra R.Vaidya (London: Routledge, 2003, pp. 159, h/bk)", Journal of International Development, vol. 17, no. 1, pp. 149-150. Vasudev, P.M. 2014, "The Governance and Regulation of International Finance", Banking & Finance Law Review, vol. 29, no. 3, pp. 587-591. Wang, R. & Zhang, Y. 2014, "Currency Internationalization and Dominant Power in International Finance", Contemporary Logistics, , no. 16, pp. 91-94. Read More
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