Icv bulletin june 2012


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Icv bulletin june 2012

  1. 1.  International Controller Association In this issue:  Setting Transfer Prices in International Groups of Companies  Croatian ICV Work GroupThrives!  History of the International Control-ICV Bulletin | July 2012 ler Association  After two congresses in April and International Experts of the ICV May nobody can say that we’re not international! I had the pleas- Controllers know how important it is to always ure of presiding over the first con- look out for new opportunities and chances and gress in Poznań, Poland (April 26 possibilities to develop. In volatile times ex- -27) - it gathered more than 150 changing knowledge and experience acquires participants from seven countries even more importance. Continuous improve- and I’m really proud of it. The ment of competences of controllers, especially second one in Munich is the tradi- controllers from International Controller Associa- tional congress of the ICV – this tion, is close to our hearts. year it took place for the 37th time and was visited by over 600 pro- On conferences and meetings of the ICV we fessionals - controllers, financial could hear the voice of not German speaking directors and managers ready to leaders who value exchange of knowledge and exchange their knowledge and experiences with their “more established” col- experience with each other. leagues very much. We will be really interna- tional if not only we will found new work But summer doesn’t mean that we all only rest. We have al- groups in different places in Europe and in ready planned lots of attractions for the autumn — see for the world, but especially when we will take yourself on our pages! international activities. That’s why we created the list of international ICV experts. One of the reasons you cannot doubt that the International Controller Association earns the first part of its name is the The list will be accessible for the leaders of not team of International Experts – we promised you more about German speaking work groups, so that they it in the first issue of the Bulletin – and here it comes! Now could invite people from this list to their meet- you can read about the idea of exchanging knowledge be- ings. The travel and accommodation costs will tween controllers from all ICV member countries. be of course beared by the members of these work groups. Knowing hospitality of the mem- We will also visit beautiful Croatia – we present the history of bers it can be not only a fruitful meeting regard- the Work Group there and the controlling approach of Croa- ing the content but also a touristically interesting tian controllers. Jasmina Očko knows more and is happy to experience for both sides. invite you to the Work Group there. We hope all work group leaders will use this And the history of the ICV - after the lecture you will know a opportunity. lot about our beginnings! See the whole list here. Much pleasure while reading! Yours Dr. Adrianna Lewandowska ICV Board Member www.controllerverein.com Controlling - Creating Future Publisher: International Controller Association ICV | Poznań Office
  2. 2. ICV Bulletin | July 2012Setting Transfer Prices in InternationalGroups of Companies -Methods, Contributing Factors and theRole of Subsidiariesby Peter Schentler und Matthias TyssenRead the whole article in the member area:http://www.controllerverein.com/For-members-only.167676.htmlNumerous companies have established international sub- processes, influence the determination of the income in thesidiaries in the last decades. There are diverse reasons for whole group of companies and have an impact on thethat: Raw materials and specific know-how available locally, groups output.proximity to customers, a low wage level and logistical ad-vantages. This trend applies not only to big companies and The goal of transfer prices is to guarantee a "correct" alloca-midsized businesses, but still more to small and medium- tion of services among various independent units. This goalsized companies. The transnational intra-group cost alloca- system serves to differentiate between various functions oftion along with numerous organizational and cultural re- transfer prices. As it is presented in image 1 (you can seequirements have gained in importance due to increasing on the Internet), there are both internal and external goalsinternationalization. Given the fact that the "right" transfer pursued. Internally transfer prices take on the function ofprices must be determined and because of tax laws and coordination. Due to strong interlocking it is often impossibleeconomic reasons, the transnational exchange of internal and pointless to create independent functions and areas inservices is very important: big companies. Resulting from that requirement for an over- all coordination can be satisfied by transfer prices function- As far as tax laws are concerned it is advisable to ing as an allembracing coordination system. In addition, comply with the national tax regulations in order to transfer prices can serve as incentive systems. avoid the danger of a double taxation. In many cases the profits gained in an individual area serve From economic point of view an equitable distribution as a basis for the assessment of the respective area within of costs within a company is a fundamental basis for the company. Thus the managers of these areas feel an the controlling and success assessment of single urge to maximize their profits. This effect is further intensi- company units or subsidiaries. fied in companies which have introduced the system of pay- ments depending on results achieved by each respectiveAs a result the external influences (e.g. wage level in the area. Thanks to the fact that transfer prices create costsrespected countries) as well as internal influences (e.g. the transparency and costs awareness they can be used asrole of subsidiaries in the affiliated group) have a decisive behavioral management tools.impact on transfer prices. In the scientific and practicallyoriented literature there are numerous pieces of advice on Finally, transfer prices fulfill the function of an internal per-setting transfer prices. However, there is no one universally formance measuring tool. In such a way services andapplicable solution available. costs can be calculated individually for each unit (profit center or subsidiary). This can serve as a basis for theThis article gives an insight into setting transfer prices from strategic and operative controlling of the whole company.scientific and practical points of view; it enables comparison As showed in image 1, transfer prices fulfill also externalbetween companies; and gives an incentive to optimize your functions. So the external performance measuring toolown transfer prices. Based on interviews, the authors show serves to determine output of legally independent subsi-how companies deal with the issue of transfer pricing, what diaries. This provides support for the subsidiaries whilekind of challenges the companies may face and which con- balancing an account.tributing factors determine the process of setting transferprices. As part of the groups taxation, transfer prices have anAims and Functions of Transfer Prices influence on the income tax if the whole company, espe- cially in international companies with varying tax rates inTransfer prices denote the monetary value of services which different countries. Provided there is crossborder goodsare not offered to external customers - these are services trade, transfer prices influence the level of the customsexchanged between independent areas/subsidiaries within a duty basis and consequently the amount of the customsgroup. Every provision of a service and its transfer gener- duty. Moreover, transfer prices can be used as price justifi-ates profit for the service provider and loss for the service cation for the public law, e.g. when subjected to regulationrecipient. These processes, recognized as profit or loss processes on certain markets (e.g. post, telecommunica- tions).© International Controller Association ICV | Poznań Office
  3. 3. ICV Bulletin | July 2012 37th Controller Congress - Munich 2012 Just a week after the Congress in Poland, the annual Con- troller Congress in Munich took place. The 37. Controller Congress concentrated also on the topic of Controller as a Business Partner. Between the speakers were controllers and CFOs from big international companies like Bayer, Deu- tsche Post DHL, Henkel, Nestlé and many others. During the congress Otto Group Hamburg received the ann- nual ControllerPreis 2012, founded by the International Con- troller Association ICV. The awarded project was “Establishing the Activity Based Costing in the Suppliers Service Center”. It was honored for a model management of internal services. “The topic “Shared Service Center“ is now the main focus of6th International Controller Congress interest of many enterprises, which want to reduce costs”,IN VOLATILE TIMES — Controller as a Business Partner explains the Chairman of the Jury, Prof. Dr. Dr. h.c. Jürgen Weber. “At the same time we have to standarize the proces-The Controlling Intelligence Adventure "IN VOLATILE TI- ses and manage them consequently. By introducing theMES - Controller as a Business Partner" - the International Activity Based Costing method Otto-Group uses a very effi-Controller Congress in Poland (April 26/27, 2012) - gathered cient but still not known tool for Service Center manage-more than 150 participants - and among them about 20 gu- ment. Otto-Group shows how to improve the high complexi-ests from abroad - from Slovenia, Estonia, Spain, Serbia, ty of the Activity Based Costing and how to increase theGermany and the United States. All speeches were transla- current low attention of the total costs for the benefit ofted from Polish into English for the foreign guests and from whole company”.English into Polish for the Polish participants.The International Controller Congress in Poznań was first ofa platform for controllers from all over the to shareknowledge, get to the cuttingedge of controlling and setnew trends. Our speakers have certainly contributed to allthese three aspects of ICV activities.A new element on this year congress was a discus-sion panel — a great opportunity to exchangethoughts and engage into full of insights discussions.Among the debaters were people from such compa-nies as Hansgrohe, Verhoeven, Winkhaus Polska,PwC, Volkswagen Poznań and Cadbury. 1. September 11, 2012, Dättwil, Switzerland 23. Controller Tagung Schweiz 2. September 27t 2012, Vienna, Austria 13. Internationale Gesundheitstagung 3. October 25-26, 2012, Slovenia 12. ACC Adriatic Controlling Conference 4. October 27, 012, Berlin, Germany 12. CIB Controlling Innovation Berlin 5. November 15, 2012, Bonn, Germany 8. CAB Controlling Advantage BonnBusy autumn with the ICV 6. November 23, 2012, Steyr, Austria 11. CIS Controlling Insights SteyrICV invites you for many interesting events in autumn.In addition to workgroup-meetings we offer many re- 7. November 29, 2012, Ehningen, Germanygional and international conferences. 10. CCS Controlling Competence StuttgartWhere can you share your experience and knowledge withICV members?© International Controller Association ICV | Poznań Office
  4. 4. ICV Bulletin | July 2012Croatian ICV Working Group Thrives!By Jasmina OčkoThe Croatian ICV Work Group has been working for one and a half year already, andpreparations for the fifth workshop are currently in progress. Jasmina Očko reportsabout the beginnings of the Work Group, about its meetings and expectations. The second workshop tackled “One Page Only Report” – one of the nicest topics for all controllers, and the most inter- esting topic for all managers. We get astounded time and again by the level of complexity of all the points that fit into a “one page only”. Jasmina Očko is Work Group Leader in Croatia. She’s controlling consultant and owner of Kognosko Consultancy, Croatia.I still vividly remember the autumn of 2010 when I was work-ing on setting up the Croatian ICV Work Group, gatheringmaterials for the first workshop, full of doubt and not know-ing where to start. My dear colleague Dragica Erčulj helpeda lot by giving me precious advice, by simply being thereand by warm words of support.Considering that then I had already worked as a controllingtrainer and consultant for years, I knew that the circle ofpeople that I know working in controlling and managementwas my greatest asset.The first step I had to take was to create a clear vision of the The idea was to gather people who are passionatework group – the way I see it, who should be in it, and what about controlling, who breathe controlling, and enjoyour main mission should be. every minute of it.At the very beginning I somehow knew what I had wanted, I invited a larger number of acquaintances and colleagues toi.e. to form a group, team of people who share a common the first workshops because the word that such a groupinterest – controlling and everything related to it. The idea exists and its aims needed to be spread. At present, thewas to gather people who are passionate about controlling, group counts 16 permanent members, although the numberwho breathe controlling, and enjoy every minute of it. It is, of grows with each workshop mostly by word-of-mouth.course, only natural that the group has managers as well,since controlling is aimed at them anyway. My thoughtswere: wouldn’t it be great to network people who understandjust how tremendously vast controlling is and that the field ofcontrolling requires a lot of invaluable knowledge and ex-perience worth sharing. Wouldn’t it be useful to networkpeople who understand that controlling is what Croatianeconomy needs and just how useful it can be for our dailywork tasks. And best of all – to share all of this wisely, use-fully and versatilely.The meetings are one-day-long workshops for the time be-ing, although our controllers and managers are highly inter-ested and motivated to work. Which is why we always lookto make the most of every opportunity to learn and ex-change our experience. We have held 4 workshops so farand have dealt with 4 very interesting topics.The first was “Is Classical Budgeting History?” It was anautumnal topic indeed having stimulated much discussionwith its controversial subheading – “Beyond Budgeting”. The workshops are one-day-long workshops for theAttitudes differed, opinions varied, although we all agreed time being, although our controllers and managers arethat planning has always existed and will continue to exist highly interested and motivated to work.for eternity.© International Controller Association ICV | Poznań Office
  5. 5. ICV Bulletin | July 2012Our last workshop was dedicated to Peter Drucker and his Regardless of the fact that we controllers are “notoriousManagement by Objectives (MBO). Looking at examples control freaks”, we must admit that the best things in lifeand case studies from practice that have been perfected happen when the least amount of planning is involved.through years of trial and error was very useful. Ultimately, my greatest wish is to see the group grow into aThe Croatian group is becoming more homogenous and large, consistent group of experts capable of solving thetighter with each workshop. Our aim is to slowly make our many problems in the field of controlling, and to make ourone-day-long meetings into two-day-long gatherings, which ICV workshops a place birthing the best ideas and providingwould be much more relaxed, and which would give us theopportunity to devote more time, besides hard work, to get- room for the exchange of first-rate knowledge and invalu-ting to know each other, to networking and socialising “off able experience of the most competent controlling experts inthe record”. Croatia.Moreover, in addition to topics arranged and agreed on inadvance, in the future we also plan to create enough spacefor spontaneous discussions and brainstorming that wouldHistory of the International Controller AssociationThe ICV history in interplay with other controlling institutionsOne person played a pivotal role in the history of the International Controller Association: Dr. Dr. h.c. Albrecht Deyhle .Deyhle was born on May 12, 1934 in Tübingen, attendedBusiness High School in Stuttgart, studied then BusinessAdministration at Ludwig-Maximilian University in Munich(business graduate) and obtained his doctorate on PoliticalScience in 1961 at Eberhard Karls University in Tübingen(Company, Interest and Savings in Joseph SchumpetersTheory of the Course and Expiry of the Capitalistic EconomyDevelopment).Already at the beginning the topics of education and trainingplayed a crucial role in Deyhles occupational activities.From 1959 Deyhle worked as an assistant at the GermanBusiness Management Institute (DIB) in Frankfurt/Main,organized there seminars and took care of their holding. In1962/63 Deyhle worked for the Plaut consulting group as aconsultant dealing with cost planning and introduction of thestandard direct costing. Prof. Albrecht Deyhle nowAfter his stint at the Plaut consulting group, Deyhle returned Even though the first seminar of the Controller Academyto the DIB as a management member. In the meantime he took place in November 1971, the Controller Academy hasdeepened his specialist experience in the field of contribu- began to exist as a company in the legal form of a Ltdtion margin accounting while fulfilling the function of an advi- (limited liability company) no sooner than since fall 1972.sor and author. In parallel with it he undertook the manage- Some of the first customers were followed by the Academyment of the Institute for Internal Auditing. In 1968 he was the foundation and to its founding partners belong: late Dr. Vic-chief editor of the publishing house Modern Industry. In tor Bataillard from Switzerland (passed away in 2003) and1969 Deyhle started his independent work. Dr. Walter Germeroth from Lörrach, Germany. Both really respected personalities who have left a lasting impressionDeyhle has a rare dual talent: he is not only a good speaker, on the development of the Controller Academy. In the yearbut also a great writer. So he has devoted ever more atten- 2000 the Ltd was converted into a public company and fromtion to his publishing activities. Already in 1967 he published then on Deyhle is a chairman of its supervisory board.the book "Profit Management", in which many controllingideas were already touched upon. In 1971 he published his Today the Controller Academy AG is a medium-sizedperennial bestseller "Controller Practice", a two-volume company with about 30 employees focused on the topicstandard work. In 1975 Deyhle launched the "Controller of training and coaching in the field of controlling.Magazine". With the print run of 10,000 the "ControllerMagazine" is by far the highest circulation journal for control- Deyhle created additional structures when he estab-ling specialists in the German speaking region. lished the Controller Association. His initiative enabled him and six further founding partners to register the associa-Writing was always important for Deyhle. Not only because tion. Among them were the above mentioned Dr. Germerothhe had something to write about and wrote with ease, but as well as Dr. Erwin Küchel, for many years active as train-also because he remained true to the motto: "Reporting is ers at the Controller Academy, and of course Dr. Alfredrewarding." He has never missed a chance to share this Blazek, for decades a trainer and partner of the Controllersentence with his colleagues and the thought behind it was Academy.to reach a durable and widespread effect through writing.© International Controller Association ICV | Poznań Office
  6. 6. ICV Bulletin | July 2012 After graduating the seven-level-program the partici- pants expressed their wish to create a forum for organ- ized exchange of experiences. This wish led to the es- tablishment of the Controller Associations work groups. And the work groups have remained to this day the heart of the ICV. In the seventies many controllers were still perceived as exotic "individuals", so much greater was the need for pro- fessional experience exchange among these like-minded people. The development of the association has proved that the main idea of the ICV has lost none of its relevance. In 1990 the association celebrated its 1,000 th member and presently there are more than 6,000 members. In 2000 the association changed its name to "Internationaler Controller Verein (ICV)". Dr. Deyhle developed and led the association from the start over many years as the Manager and Chairman and has accompanied it with his ever watchful eye as the Honorary Chairman and Deputy Chairman of the Committee of Trus- tees. In the mid nineties at the instigation of the association the IGC was created - the International Group of Con- trolling, the merger of the most important controlling educational and training institutes, software companies and other institutions having interest in developing con- trolling. Deyhle was also a great support here, first to the IGC foundation as well as later as a member of the Manag- ing Committee. He paid and is still paying a special attention to the mutual understanding. Hence one of the first IGC high -priority projects was the "Controlling Dictionary". On November 14, 2008 Dr. Albrecht Deyhle became for his great dedication the honorary doctorate from the WHU - Otto Beisheim School of Management. It is thanks to Deyhle "that controllers have gained good reputation and respect in the German speaking region", explained in his congratula- tory speech Prof. Dr. Dr. h. c. Jürgen Weber, a professor of controlling and company management at the WHU. "You have shaped a new business discipline and considerably contributed to its success in companies", emphasized We- ber. You would be hard-pressed to find another person who contributed so much to putting theory into practice.Beginnings of the International Controller Association (atthat time Controller Association):1) Meeting of the Work Group — May 19762, 3) General Meeting of the Members — May 1976Deyhle created additional structures when he estab-lished the Controller Association. His initiative enabledhim and six further founding partners to register the associa-tion. Among them were the above mentioned Dr. Germerothas well as Dr. Erwin Küchel, for many years active as train-ers at the Controller Academy, and of course Dr. AlfredBlazek, for decades a trainer and partner of the ControllerAcademy. Prof. Deyhle at the Controller Congress — 1977 or 1978© International Controller Association ICV | Poznań Office
  7. 7. ICV Bulletin | July 2012The ControllerPreis 2013 Controlling- ICV Mission Statementto be taken NachwuchsPreis 2012 The ICV being a non-commerciallyAfter Otto Group was rewarded for We also invite you to compete for„Establishing the Activity Based Controlling-NachwuchsPreis 2012 oriented association is the biggestCosting in the Suppliers Service – a price for young professionals. controller organization in Europe.Center“ on the 37th Controller Con- Awarded will be innovative andgress in Munich, it’s time to invite practical ideas. Compete with youryou to compete for the Controller- final assignment! The price will be ICV Key ObjectivesPreis 2013 by submitting your con- awarded on October 27, 2012 introlling solutions. Berlin. The ICV as an active international network More about the ICV awards: http:// www.controllerverein.com/ enhances the function Awards.158549.html of practically applied controlling and the role of the controllerChallenge your colleagues in the in the responsibilitycompetition and face the decision for successfulof our competent judges!More about the ICV awards: http://www.controllerverein.com/Awards.158549.htmlAll work groups in non-German speaking countriesBosna and HercegovinaSlavko Simićbono@blic.netBulgaria PolandDenko Yamboliev Gdańsk Warszawadenko@excite.com Robert Panufnik Karol Sikora r.panufnik@vector.com.pl karol.sikora@icv.plCroatiaJasmina Očko Katowice Wrocławjasmina.ocko@kognosko.hr Anna Jarkulisz Honorata Ulatowska anna.jarkulisz@arcelormittal.com honorata.ulatowska@icv.plEnglandMilena Heim Kraków Zielona Góramilena.heim@gmx.net Dorota Gołąb-Bełtowicz Małgorzata Lepak dbeltowicz@bonifratrzy.krakow.pl malgorzata.lepak@icv.plEstoniaToomas Haldma Lublin Romaniatoomas.haldma@ut.ee Luiza Zaporowska Cristina Hodea luiza.zaporowska@emperia.pl cristina.hodea@gmail.comLithuaniaEdita Gimžauskienė Łódź Russiaedita.gimzauskiene@ktu.lt Karolina Zielińska Valentin Usenkov karolina.zielinska@icv.pl zoom@mail.ruHungaryBudapest 1 Poznań SerbiaErvin Nemesdy Dariusz Gulczyński Bojan Šćepanovićnemesdy@mce.hu dariusz.gulczynski@icv.pl mcb@eunet.rsBudapest 2 Szczecin SloveniaAndreas Kovacs Aleksander Socha Dragica Erčuljkovács@mcskft.hu aleksander.socha@ramirent.pl dragica.erculj@crmt.comItaly Toruń SpainClaudio Zoldan Andrzej Derkowski Ulrich Müller Bosomclaudio.zoldan@bofrost.it andrzej.derkowski@neuca.pl ulrich.mueller.bosom@gmail.comImprint Editing International Controller AssociationPublisher and Copyrights: Brigitte Dienstl-Arnegger ICV Office Poland Dr. Herwig Friedag Ul.Fredry 7/1International Controller Association 61-809 Poznań PLPublic Relations Committee Dr. Adrianna Lewandowska Phone/Fax +48 61 853 20 10 Hans-Peter Sander Mail: anna.wlodarczyk@icv.pl Anna Włodarczyk