Malaysian Financial Reporting Standard 116 Essay

Malaysian Financial Reporting Standard 116 Property, Plant and Equipment This version includes amendments resulting from MFRSs with effective dates no later than 1 January 2012. Amendments with an effective date later than 1 January 2012 MFRS 116 has been amended by MFRS 13 Fair Value Measurement*. As those amendments have an effective date after 1 January 2012 they are not included in this edition. * effective date 1 January 2013 559 MFRS 116 CONTENTS paragraphs Preface INTRODUCTION IN1–IN15 MALAYSIAN FINANCIAL REPORTING STANDARD 116 PROPERTY, PLANT AND EQUIPMENT OBJECTIVE SCOPE DEFINITIONS RECOGNITION Initial costs Subsequent costs MEASUREMENT AT RECOGNITION Elements of cost Measurement of cost MEASUREMENT AFTER RECOGNITION Cost model Revaluation model Depreciation Depreciable amount and depreciation period Depreciation method Impairment Compensation for impairment DERECOGNITION DISCLOSURE TRANSITIONAL PROVISIONS EFFECTIVE DATE WITHDRAWAL OF OTHER PRONOUNCEMENTS 1 2–5 6 7–14 11 12–14 15–28 16–22 23–28 29–66 30 31–42 43–62 50–59 60–62 63 65–66 67–72 73–79 80 81–81E 82–83 560  © IFRS Foundation MFRS 116 Malaysian Financial Reporting Standard 116 Property, Plant and Equipment (MFRS 116) is set out in paragraphs 1–83. All the paragraphs have equal authority. MFRS 116 should be read in the context of its objective and the Basis for Conclusions, the Foreword to Financial Reporting Standards and the Conceptual Framework for Financial Reporting. MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.  © IFRS Foundation 561 MFRS 116 Preface The Malaysian Accounting Standards Board (MASB) is implementing its policy of convergence through adopting International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) for application for annual periods beginning on or after 1 January 2012. The IASB defines IFRSs as comprising: (a) International Financial Reporting Standards; (b) International Accounting Standards; (c) IFRIC Interpretations; and (d) SIC Interpretations. Malaysian Financial Reporting Standards (MFRSs) equivalent to IFRSs that apply to any reporting period beginning on or after 1 January 2012 are: (a) Malaysian Financial Reporting Standards; and (b) IC Interpretations. First-time application of MFRSs equivalent to IFRSs Application of this Standard will begin in the first-time adopter’s * first annual reporting period beginning on or after 1 January 2012 in the context  of adopting MFRSs equivalent to IFRSs. In this case, the requirements of MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards must be observed. Application of MFRS 1 is necessary as otherwise such financial statements will not be able to assert compliance with IFRS. MFRS 1, the Malaysian equivalent of IFRS 1 First-time Adoption of International Financial Reporting Standards, requires prior period information, presented as comparative information, to be restated as if the requirements of MFRSs effective for annual period beginning on or after 1 January 2012 have always been applied, except when it (1) prohibits retrospective application in some aspects or (2) allows the first-time adopter to use one or more of the exemptions or except ions contained therein. This means that, in preparing its first MFRS financial statements* for a financial period beginning on or after 1 January 2012, the first-time adopter shall refer to the provisions contained in MFRS 1 on matters relating to transition and effective dates instead of the transitional provision and effective date contained in the respective MFRSs. This differs from previous requirements where an entity accounted for changes of accounting policies in accordance with the specific transitional provisions contained in the respective Financial Reporting Standards (FRSs) or in accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors when the FRS did not include specific transitional provisions. * Appendix A of MFRS 1 defines first-time adopter and first MFRS financial statements. 562 MFRS 116 In this regard the effective and issuance dates contained in this Standard are those of the IASB’s and are inapplicable in the new MFRS framework since MFRS 1 requirements will be applied on 1 January 2012. Comparison and compliance with IAS 16 MFRS 116 is equivalent to IAS 16 Property, Plant and Equipment as issued and amended by the IASB, including the effective and issuance dates. Entities that comply with MFRS 116 will  simultaneously be in compliance with IAS 16. 563 MFRS 116 Introduction IN1 International Accounting Standard 16 Property, Plant and Equipment (IAS 16) replaces IAS 16 Property, Plant and Equipment (revised in 1998), and should be applied for annual periods beginning on or after 1 January 2005. Earlier application is encouraged. The Standard also replaces the following Interpretations: ï‚ · ï‚ · ï‚ · SIC-6 Costs of Modifying Existing Software SIC-14 Property, Plant and Equipment—Compensation for the Impairment or Loss of Items SIC-23 Property, Plant and Equipment—Major Inspection or Overhaul Costs. IASB’s reasons for revising IAS 16 IN2 The International Accounting Standards Board developed this revised IAS 16 as part of its project on Improvements to International Accounting Standards. The project was undertaken in the light of queries and criticisms raised in relation to the Standards by securities regulators, professional accountants and other interested parties. The objectives of the project were to reduce or eliminate alternatives, redundancies and conflicts within the Standards, to deal with some convergence issues and to make other improvements. For IAS 16 the IASB’s main objective was a limited revision to provide additional guidance and clarification on selected matters. The IASB did not reconsider the fundamental approach to the accounting for property, plant and equipment contained in IAS 16. IN3 The main changes of IAS 16 IN4 The main changes from the previous version of IAS 16 are described below. Scope IN5 This Standard clarifies that an entity is required to apply the principles of this Standard to items of property, plant and equipment used to develop or maintain (a) biological assets and (b) mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources. Recognition: subsequent costs  IN6 An entity evaluates under the general recognition principle all property, plant and equipment costs at the time they are incurred. Those costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service an item. The previous version of IAS 16 contained two recognition principles. An entity applied the second recognition principle to subsequent costs.  © 564 IFRS Foundation MFRS 116 Measurement at recognition: asset dismantlement, removal and restoration costs IN7 The cost of an item of property, plant and equipment includes the costs of its dismantlement, removal or restoration, the obligation for which an entity incurs as a consequence of installing the item. Its cost also includes the costs of its dismantlement, removal or restoration, the obligation for which an entity incurs as a consequence of using the item during a particular period for purposes other than to produce inventories during that period. The previous version of IAS 16 included within its scope only the costs incurred as a consequence of installing the item. Measurement at recognition: asset exchange transactions IN8 An entity is required to measure an item of property, plant and equipment acquired in exchange for a non-monetary asset or assets, or a combination of monetary and non-monetary assets, at fair value unless the exchange  transaction lacks commercial substance. Under the previous version of IAS 16, an entity measured such an acquired asset at fair value unless the exchanged assets were similar. Measurement after recognition: revaluation model IN9 If fair value can be measured reliably, an entity may carry all items of property, plant and equipment of a class at a revalued amount, which is the fair value of the items at the date of the revaluation less any subsequent accumulated depreciation and accumulated impairment losses. Under the previous version of IAS 16, use of revalued amounts did not depend on whether fair values were reliably measurable. Depreciation: unit of measure IN10 An entity is required to determine the depreciation charge separately for each significant part of an item of property, plant and equipment. The previous version of IAS 16 did not as clearly set out this requirement. Depreciation: depreciable amount  IN11 An entity is required to measure the residual value of an item of property, plant and equipment as the amount it estimates it would receive currently for the asset if the asset were already of the age and in the condition expected at the end of its useful life. The previous version of IAS 16 did not specify whether the residual value was to be this amount or the amount, inclusive of the effects of inflation, that an entity expected to receive in the future on the asset’s actual retirement date. Depreciation: depreciation period IN12 An entity is required to begin depreciating an item of property, plant and equipment when it is available for use and to continue depreciating it until it  © IFRS Foundation 565 MFRS 116 is derecognised, even if during that period the item is idle. The previous version of IAS 16 did not specify when depreciation of an item began and specified that an entity should cease depreciating an item that it had retired from active use and was holding for disposal. Derecognition: derecognition date IN13 An entity is required to derecognise the carrying amount of an item of property, plant and equipment that it disposes of on the date the criteria for the sale of goods in IAS 18 Revenue would be met. The previous version of IAS 16 did not require an entity to use those criteria to determine the date on which it derecognised the carrying amount of a disposed-of item of property, plant and equipment. An entity is required to derecognise the carrying amount of a part of an item of property, plant and equipment if that part has been replaced and the entity has included the cost of the replacement in the carrying amount of the item. The previous version of IAS 16 did not extend its derecognition principle to such parts; rather, its recognition principle for subsequent expenditures effectively precluded the cost of a replacement from being included in the carrying amount of the item. IN14 Derecognition: gain classification IN15 An entity cannot classify as revenue a gain it realises on the disposal of an item of property, plant and equipment. The previous version of IAS 16 did not contain this provision. 566  © IFRS Foundation MFRS 116 Malaysian Financial Reporting Standard 116 Property, Plant and Equipment Objective 1 The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity’s investment in its property, plant and equipment and the changes in such investment. The principal issues in accounting for property, plant and equipment are the recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognised in relation to them. Scope 2 This Standard shall be applied in accounting for property, plant and equipment except when another Standard requires or permits a different accounting treatment. This Standard does not apply to: (a) property, plant and equipment classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations; 3 (b) biological assets related to agricultural activity (see MFRS 141 Agriculture); (c) the recognition and measurement of exploration and evaluation assets (see MFRS 6 Exploration for and Evaluation of Mineral Resources); or (d) mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources. However, this Standard applies to property, plant and equipment used to develop or maintain the assets described in (b)–(d). 4 Other Standards may require recognition of an item of property, plant and equipment based on an approach different from that in this Standard. For example, MFRS 117 Leases requires an entity to evaluate its recognition of an item of leased property, plant and equipment on the basis of the transfer of risks and rewards. However, in such cases other aspects of the accounting treatment for these assets, including depreciation, are prescribed by this Standard. An entity using the cost model for investment property in accordance with MFRS 140 Investment Property shall use the cost model in this Standard. 5 Definitions 6 The following terms are used in this Standard with the meanings specified:  © IFRS Foundation 567 MFRS 116 Carrying amount is the amount at which an asset is recognised after deducting any accumulated depreciation and accumulated impairment losses. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other MFRSs, eg MFRS 2 Share-based Payment. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Entity-specific value is the present value of the cash flows an entity expects to arise from the continuing use of an asset and from its disposal at the end of its useful life or expects to incur when settling a liability. Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction. An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount. Property, plant and equipment are tangible items that: (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and (b) are expected to be used during more than one period. Recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. The residual value of an asset is the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. Useful life is: (a) the period over which an asset is expected to be available for use by an entity;  or (b) the number of production or similar units expected to be obtained from the asset by an entity. Recognition 7 The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if: (a) it is probable that future economic benefits associated with the item will flow to the entity; and (b) the cost of the item can be measured reliably.  © 568 IFRS Foundation MFRS 116 8 Spare parts and servicing equipment are usually carried as inventory and recognised in profit or loss as consumed. However, major spare parts and stand-by equipment qualify as property, plant and equipment when an entity expects to use them during more than one period. Similarly, if the spare parts and servicing equipment can be used only in connection with an item of property, plant and equipment, they are accounted for as property, plant and equipment. This Standard does not prescribe the unit of measure for recognition, ie what constitutes an item of property, plant and equipment. Thus, judgement is required in applying the recognition criteria to an entity’s specific circumstances. It may be appropriate to aggregate individually insignificant items, such as moulds, tools and dies, and to apply the criteria to the aggregate value. An entity evaluates under this recognition principle all its property, plant and equipment costs at the time they are incurred. These costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. 9 10 Initial costs 11 Items of property, plant and equipment may be acquired for safety or environmental reasons. The acquisition of such property, plant and equipment, although not directly increasing the future economic benefits of any particular existing item of property, plant and equipment, may be necessary for an entity to obtain the future economic benefits from its other assets. Such items of property, plant and equipment qualify for recognition as assets because they enable an entity to derive future economic benefits from related assets in excess of what could be derived had those items not been acquired. For example, a chemical manufacturer may install new chemical handling processes to comply with environmental requirements for the production and storage of dangerous chemicals; related plant enhancements are recognised as an asset because without them the entity is unable to manufacture and sell chemicals. However, the resulting carrying amount of such an asset and related assets is reviewe d for impairment in accordance with MFRS 136 Impairment of Assets. Subsequent costs 12 Under the recognition principle in paragraph 7, an entity does not recognise in the carrying amount of an item of property, plant and equipment the costs of the day-to-day servicing of the item. Rather, these costs are recognised in profit or loss as incurred. Costs of day-to-day servicing are primarily the costs of labour and consumables, and may include the cost of small parts. The purpose of these expenditures is often described as for the ‘repairs and maintenance’ of the item of property, plant and equipment. Parts of some items of property, plant and equipment may require replacement at regular intervals. For example, a furnace may require relining  © 13 IFRS Foundation 569 MFRS 116 after a specified number of hours of use, or aircraft interiors such as seats and galleys may require replacement several times during the  life of the airframe. Items of property, plant and equipment may also be acquired to make a less frequently recurring replacement, such as replacing the interior walls of a building, or to make a nonrecurring replacement. Under the recognition principle in paragraph 7, an entity recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if the recognition criteria are met. The carrying amount of those parts that are replaced is derecognised in accordance with the derecognition provisions of this Standard (see paragraphs 67–72). 14 A condition of continuing to operate an item of property, plant and equipment (for example, an aircraft) may be performing regular major inspections for faults regardless of whether parts of the item are replaced. When each major inspection is performed, its cost is recognised in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Any remaining carrying amount of the cost of the previous inspection (as distinct from physical parts) is derecognised. This occurs regardless of whether the cost of the previous inspection was identified in the transaction in which the item was acquired or constructed. If necessary, the estimated cost of a future similar inspection may be used as an indication of what the cost of the existing inspection component was when the item was acquired or constructed. Measurement at recognition 15 An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost. Elements of cost 16 The cost of an item of property, plant and equipment comprises: (a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates. (b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. (c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the  obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period. 17 Examples of directly attributable costs are: (a) costs of employee benefits (as defined in MFRS 119 Employee Benefits) arising directly from the construction or acquisition of the item of property, plant and equipment; 570  © IFRS Foundation MFRS 116 (b) costs of site preparation; (c) initial delivery and handling costs; (d) installation and assembly costs; (e) costs of testing whether the asset is functioning properly, after deducting the net proceeds from selling any items produced while bringing the asset to that location and condition (such as samples produced when testing equipment); and professional fees. (f) 18 An entity applies MFRS 102 Inventories to the costs of obligations for dismantling, removing and restoring the site on which an item is located that are incurred during a particular period as a consequence of having used the item to produce inventories during that period. The obligations for costs accounted for in accordance with MFRS 102 or MFRS 116 are recognised and measured in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets. Examples of costs that are not costs of an item of property, plant and equipment are: (a) costs of opening a new facility; 19 (b) costs of introducing a new product or service (including costs of advertising and promotional activities); (c) costs of conducting business in a new location or with a new class of customer (including costs of staff training); and (d) administration and other general overhead costs. 20 Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management. Therefore, costs incurred in using or redeploying an item are not included in the carrying amount of that item. For example, the following costs are not included in the carrying amount of an item of property, plant and equipment: (a) costs incurred while an item capable of operating in the manner intended by management has yet to be brought into use or is operated at less than full capacity; (b) initial operating losses, such as those incurred while demand for the item’s output builds up; and (c) 21 costs of relocating or reorganising part or all of an entity’s operations. Some operations occur in connection with the construction or development of an item of property, plant and equipment, but are not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by management. These incidental operations may occur before or during the construction or development activities. For example, income may be earned through using a building site as a car park until construction starts. Because incidental operations are not  © IFRS Foundation 571 MFRS 116 necessary to bring an item to the location and condition necessary  for it to be capable of operating in the manner intended by management, the income and related expenses of incidental operations are recognised in profit or loss and included in their respective classifications of income and expense. 22 The cost of a self-constructed asset is determined using the same principles as for an acquired asset. If an entity makes similar assets for sale in the normal course of business, the cost of the asset is usually the same as the cost of constructing an asset for sale (see MFRS 102). Therefore, any internal profits are eliminated in arriving at such costs. Similarly, the cost of abnormal amounts of wasted material, labour, or other resources incurred in self-constructing an asset is not included in the cost of the asset. MFRS 123 Borrowing Costs establishes criteria for the recognition of interest as a component of the carrying amount of a self-constructed item of property, plant and equipment. Measurement of cost 23 The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and the total payment is recognised as interest over the period of credit unless such interest is capitalised in accordance with MFRS 123. One or more items of property, plant and equipment may be acquired in exchange for a non-monetary asset or assets, or a combination of monetary and non-monetary assets. The following discussion refers simply to an exchange of one non-monetary asset for another, but it also applies to all exchanges described in the preceding sentence. The cost of such an item of property, plant and equipment is measured at fair value unless (a) the exchange transaction lacks commercial substance or (b) the fair value of neither the asset received nor the asset given up is reliably measurable. The acquired item is measured in this way even if an entity cannot immediately derecognise the asset given up. If the acquired item is not measured at fair value, its cost is measured at the carrying amount of the asset given up. An entity determines whether an exchange transaction has commercial substance by considering the extent to which its future cash flows are expected to change as a result of the transaction. An exchange transaction has commercial substance if: (a) the configuration (risk, timing and amount) of the cash flows of the asset  received differs from the configuration of the cash flows of the asset transferred; or 24 25 (b) the entity-specific value of the portion of the entity’s operations affected by the transaction changes as a result of the exchange; and (c) the difference in (a) or (b) is significant relative to the fair value of the assets exchanged. For the purpose of determining whether an exchange transaction has commercial substance, the entity-specific value of the portion of the entity’s 572  © IFRS Foundation MFRS 116 operations affected by the transaction shall reflect post-tax cash flows. The result of these analyses may be clear without an entity having to perform detailed calculations. 26 The fair value of an asset for which comparable market transactions do not exist is reliably measurable if (a) the variability in the range of reasonable fair value estimates is not significant for that asset or (b) the probabilities of the various estimates within the range can be reasonably assessed and used in estimating fair value. If an entity is able to determine reliably the fair value of either the asset received or the asset given up, then the fair value of the asset given up is used to measure the cost of the asset received unless the fair value of the asset received is more clearly evident. The cost of an item of property, plant and equipment held by a lessee under a finance lease is determined in accordance with MFRS 117. The carrying amount of an item of property, plant and equipment ma y be reduced by government grants in accordance with MFRS 120 Accounting for Government Grants and Disclosure of Government Assistance. 27 28 Measurement after recognition 29 An entity shall choose either the cost model in paragraph 30 or the revaluation model in paragraph 31 as its accounting policy and shall apply that policy to an entire class of property, plant and equipment. Cost model 30 After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses. Revaluation model 31 After recognition as an asset, an item of property, plant and equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. The fair value of land and buildings is usually determined from market-based evidence by appraisal that is normally undertaken by professionally qualified valuers. The fair value of items of plant and equipment is usually their market value determined by appraisal. If there is no market-based evidence of fair value because of the specialised nature of the item of property, plant and equipment and the item is rarely 32 33  © IFRS Foundation 573 MFRS 116 sold, except as part of a continuing business, an entity may need to estimate fair value using an income or a depreciated replacement cost approach. 34 The frequency of revaluations depends upon the changes in fair values of the items of property, plant and equipment being revalued. When the fair value of a revalued asset differs materially from its carrying amount, a further revaluation is required. Some items of property, plant and equipment experience significant and volatile changes in fair value, thus necessitating annual revaluation. Such frequent revaluations are unnecessary for items of property, plant and equipment with only insignificant changes in fair value. Instead, it may be necessary to revalue the item only every three or five years. When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation is treated in one of the following ways: (a) restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount. This method is often used when an asset is revalued by means of applying an index to determine its depreciated replacement cost. 35 (b) eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset. This method is often used for buildings. The amount of the adjustment arising on the restatement or elimination of accumulated depreciation forms part of the increase or decrease in carrying amount that is accounted for in accordance with paragraphs 39 and 40. 36 If an item of property, plant and equipment is revalued, the entire class of property, plant and equipment to which that asset belongs shall be revalued. A class of property, plant and equipment is a grouping of assets of a similar nature and use in an entity’s operations. The following are examples of separate classes: (a) land; 37 (b) land and buildings; (c) machinery; (d) ships; (e) (f) aircraft; motor vehicles; (g) furniture and fixtures; and (h) office equipment. 574  © IFRS Foundation MFRS 116 38 The items within a class of property, plant and equipment are revalued simultaneously to avoid selective revaluation of assets and the reporting of amounts in the financial statements that are a mixture of costs and values as at different dates. However, a class of assets may be revalued on a rolling basis provided revaluation of the class of assets is completed within a short period and provided the revaluations are kept up to date. If an asset’s carrying amount is increased as a result of a revaluation, the increase shall be recognised in other comprehensive income and accumulated in equity under the heading of revaluation surplus. However, the increase shall be recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. If an asset’s carrying amount is decreased as a result of a revaluation, the decrease shall be recognised in profit or loss. However, the decrease shall be recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus. The revaluation surplus included in equity in respect of an item of property, plant and equipment may be transferred directly to retained earnings when the asset is derecognised. This may involve transferring the whole of the surplus when the asset is retired or disposed of. However, some of the surplus may be transferred as the asset is used by an entity. In such a case, the amount of the surplus transferred would be the difference between depreciation based on the revalued carrying amount of the asset and  depreciation based on the asset’s original cost. Transfers from revaluation surplus to retained earnings are not made through profit or loss. The effects of taxes on in come, if any, resulting from the revaluation of property, plant and equipment are recognised and disclosed in accordance with MFRS 112 Income Taxes. 39 40 41 42 Depreciation 43 Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately. An entity allocates the amount initially recognised in respect of an item of property, plant and equipment to its significant parts and depreciates separately each such part. For example, it may be appropriate to depreciate separately the airframe and engines of an aircraft, whether owned or subject to a finance lease. Similarly, if an entity acquires property, plant and equipment subject to an operating lease in which it is the lessor, it may be appropriate to depreciate separately amounts reflected in the cost of that item that are attributable to favourable or unfavourable lease terms relative to market terms. 44  © IFRS Foundation 575 MFRS 116 45 A significant part of an item of property, plant and equipment may have a useful life and a depreciation method that are the same as the useful life and the depreciation method of another significant part of that same item. Such parts may be grouped in determining the depreciation charge. To the extent that an entity depreciates separately some parts of an item of property, plant and equipment, it also depreciates separately the remainder of the item. The remainder consists of the parts of the item that are individually not significant. If an entity has varying expectations for these parts, approximation techniques may be necessary to depreciate the remainder in a manner that faithfully represents the consumption pattern and/or useful life of its parts. An entity may choose to depreciate separately the parts of an item that do not have a cost that is significant in relation to the total cost of the item. The depreciation charge for each period shall be recognised in prof it or loss unless it is included in the carrying amount of another asset. The depreciation charge for a period is usually recognised in profit or loss. However, sometimes, the future economic benefits embodied in an asset are absorbed in producing other assets. In this case, the depreciation charge constitutes part of the cost of the other asset and is included in its carrying amount. For example, the depreciation of manufacturing plant and equipment is included in the costs of conversion of inventories (see MFRS 102). Similarly, depreciation of property, plant and equipment used for development activities may be included in the cost of an intangible asset recognised in accordance with MFRS 138 Intangible Assets. Depreciable amount and depreciation period 50 51 The depreciable amount of an asset shall be allocated on a systematic basis over its useful life. The residual value and the useful life of an asset shall be reviewed at least at each financial year-end and, if expectations differ from previous estimates, the change(s) shall be accounted for as a change in an accounting estimate in accordance with MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Depreciation is recognised even if the fair value of the asset exceeds its carrying amount, as long as the asset’s residual value does not exceed its carrying amount. Repair and maintenance of an asset do not negate the need to depreciate it. The depreciable amount of an asset is determined after deducting its residual value. In practice, the residual value of an asset is often  insignificant and therefore immaterial in the calculation of the depreciable amount. The residual value of an asset may increase to an amount equal to or greater than the asset’s carrying amount. If it does, the asset’s depreciation charge is 46 47 48 49 52 53 54 576  © IFRS Foundation MFRS 116 zero unless and until its residual value subsequently decreases to an amount below the asset’s carrying amount. 55 Depreciation of an asset begins when it is available for use, ie when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with MFRS 5 and the date that the asset is derecognised. Therefore, depreciation does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. However, under usage methods of depreciation the depreciation charge can be zero while there is no production. The future economic benefits embodied in an asset are consumed by an entity principally through its use. However, other factors, such as technical or commercial obsolescence and wear and tear while an asset remains idle, often result in  the diminution of the economic benefits that might have been obtained from the asset. Consequently, all the following factors are considered in determining the useful life of an asset: (a) expected usage of the asset. Usage is assessed by reference to the asset’s expected capacity or physical output. 56 (b) expected physical wear and tear, which depends on operational factors such as the number of shifts for which the asset is to be used and the repair and maintenance programme, and the care and maintenance of the asset while idle. (c) technical or commercial obsolescence arising from changes or improvements in production, or from a change in the market demand for the product or service output of the asset. (d) legal or similar limits on the use of the asset, such as the expiry dates of related leases. 57 The useful life of an asset is defined in terms of the asset’s expected utility to the entity. The asset management policy of the entity may involve the disposal of assets after a specified time or after consumption of a specified proportion of the future economic benefits embodied in the asset. Therefore, the useful life of an asset may be shorter than its economic life. The estimation of the useful life of the asset is a matter of judgement based on the experience of the entity with similar assets. Land and buildings are separable assets and are accounted for separately, even when they are acquired together. With some exceptions, such as quarries and sites used for landfill, land has an unlimited useful life and therefore is not depreciated. Buildings have a limited useful life and therefore are depreciable assets. An increase in the value of the land on which a building stands does not affect the determination of the depreciable amount of the building. If the cost of land includes the costs of site dismantlement, removal and restoration, that portion of the land asset is depreciated over the period of benefits obtained by incurring those costs. In some cases, the land itself may 58 59  © IFRS Foundation 577 MFRS 116 have a limited useful life, in which case it is depreciated in a manner that reflects the benefits to be derived from it. Depreciation method 60 61 The depreciation method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. The depreciation method applied to an asset shall be reviewed at least at each financial year-end and, if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset, the method shall be changed to reflect the changed pattern. Such a change shall be accounted for as a change in an accounting estimate in accordance with MFRS 108. A variety of depreciation methods can be used to allocate the depreciable amount of an asset on a systematic basis over its useful life. These methods include the straight-line method, the diminishing balance method and the units of production method. Straight-line depreciation results in a constant charge over the useful life if the asset’s residual value does not change. The diminishing balance method results in a decreasing charge over the useful life. The units of production method results in a charge based on the expected use or output. The entity selects the method that most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. That method is applied consistently from period to period unless there is a change in the expected pattern of consumption of those future economic benefits. 62 Impairment 63 To determine whether an item of property, plant and equipment is impaired, an entity applies MFRS 136 Impairment of Assets. That Standard explains how an entity reviews the carrying amount of its assets, how it determines the recoverable amount of an asset, and when it recognises, or reverses the recognition of, an impairment loss. [Deleted by IASB] 64 Compensation for impairment 65 Compensation from third parties for items of property, plant and equipment that were impaired, lost or given up shall be included in profit or loss when the compensation becomes receivable. Impairments or losses of items of property, plant and equipment, related claims for or payments of compensation from third parties and any subsequent purchase or construction of replacement assets are separate economic events and are accounted for separately as follows: (a) impairments of items of property, plant and equipment are recognised in accordance with MFRS 136; 66 578  © IFRS Foundation MFRS 116 (b) derecognition of items of property, plant and equipment retired or disposed of is determined in accordance with this Standard; (c) compensation from third parties for items of property, plant and equipment that were impaired, lost or given up is included in determining profit or loss when it becomes receivable; and (d) the cost of items of property, plant and equipment restored, purchased or constructed as replacements is determined in accordance with this Standard. Derecognition 67 The carrying amount of an item of property, plant and equipment shall be derecognised: (a) on disposal; or (b) when no future economic benefits are expected from its use or disposal. 68 The gain or loss arising from the derecognition of an item of property, plant and equipment shall be included in profit or loss when the item is derecognised (unless MFRS 117 requires otherwise on a sale and leaseback). Gains shall not be classified as revenue. However, an entity that, in the course of its ordinary activities, routinely sells items of property, plant and equipment that it has held for rental to others shall transfer such assets to inventories at their carrying amount when they cease to be rented and become held for sale. The proceeds from the sale of such assets shall be recognised as revenue in accordance with MFRS 118 Revenue. MFRS 5 does not apply when assets that are held for sale in the ordinary course of business are transferred to inventories. The disposal of an item of property, plant and equipment may occur in a variety of ways (eg by sale, by entering into a finance lease or by donation). In determining the date of disposal of an item, an entity applies the criteria in MFRS 118 for recognising revenue from the sale of goods. MFRS 117 applies to disposal by a sale and leaseback. If, under the recognition principle in paragraph 7, an entity recognises in the carrying amount of an item of property, plant and equipment the cost of a replacement for part of the item, then it derecognises the carrying amount of the replaced part regardless of whether the replaced part had been depreciated separately. If it is not practicable for an entity to determine the carrying amount of the replaced part, it may use the cost of the replacement as an indication of what the cost of the replaced part was at the time it was acquired or constructed. The gain or loss arising from the derecognition of an item of property, plant and equipment sha ll be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. 68A 69 70 71  © IFRS Foundation 579 MFRS 116 72 The consideration receivable on disposal of an item of property, plant and equipment is recognised initially at its fair value. If payment for the item is deferred, the consideration received is recognised initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent is recognised as interest revenue in accordance with MFRS 118 reflecting the effective yield on the receivable. Disclosure 73 The financial statements shall disclose, for each class of property, plant and equipment: (a) the measurement bases used for determining the gross carrying amount; (b) the depreciation methods used; (c) the useful lives or the depreciation rates used; (d) the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period; and (e) a reconciliation of the carrying amount at the beginning and end of the period showing: (i) (ii) additions; assets classified as held for sale or included in a disposal group classified as held for sale in accordance with MFRS 5 and other disposals; acquisitions through business combinations; increases or decreases resulting from revaluations under paragraphs 31, 39 and 40 and from impairment losses recognised or reversed in other comprehensive income in accordance with MFRS 136; impairment losses recognised in profit or loss in accordance with MFRS 136; impairment losses reversed in profit or loss in accordance with MFRS 136; (iii) (iv) (v) (vi) (vii) depreciation; (viii) the net exchange differences arising on the translation of the financial statements from the functional currency into a different presentation currency, including the translation of a foreign operation into the presentation currency of the reporting entity; and (ix) other changes. 580  © IFRS Foundation MFRS 116 74 The financial statements shall also disclose: (a) the existence and amounts of restrictions on title, and property, plant and equipment pledged as security for liabilities; (b) the amount of expenditures recognised in the carrying amount of an item of property, plant and equipment in the course of its construction; (c) the amount of contractual commitments for the acquisition of property, plant and equipment; and (d) if it is not disclosed separately in the statement of comprehensive income, the amount of compensation from third parties for items of property, plant and equipment that were impaired, lost or given up that is included in profit or loss. 75 Selection of the depreciation method and estimation of the useful life of assets are matters of judgement. Therefore, disclosure of the methods adopted and the estimated useful lives or depreciation rates provides users of financial statements with information that allows them to review the policies selected by management and enables comparisons to be made with other entities. For similar reasons, it is necessary to disclose: (a) depreciation, whether recognised in profit or loss or as a part of the cost of other assets, during a period; and (b) accumulated depreciation at the end of the period. 76 In accordance with MFRS 108 an entity discloses the nature and effect of a change in an accounting estimate that has an effect in the current period or is expected to have an effect in subsequent periods. For property, plant and equipment, such disclosure may arise from changes in estimates with respect to: (a) residual values; (b) the estimated costs of dismantling, removing or restoring items of property, plant and equipment; (c) useful lives; and (d) depreciation methods. 77 If items of property, plant and equipment are stated at revalued amounts, the following shall be disclosed: (a) the effective date of the revaluation; (b) whether an independent valuer was involved; (c) the methods and significant assumptions applied in estimating the items’ fair values; (d) the extent to which the items’ fair values were determined directly by reference to observable prices in an active market or recent market transactions on arm’s length terms or were estimated using other valuation techniques;  © IFRS Foundation 581 MFRS 116 (e) for each revalued class of property, plant and equipment, the carrying amount that would have been recognised had the assets been carried under the cost model; and the revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders. (f) 78 In accordance with MFRS 136 an entity discloses information on impaired property, plant and equipment in addition to the information required by  paragraph 73(e)(iv)–(vi). Users of financial statements may also find the following information relevant to their needs: (a) the carrying amount of temporarily idle property, plant and equipment; 79 (b) the gross carrying amount of any fully depreciated property, plant and equipment that is still in use; (c) the carrying amount of property, plant and equipment retired from active use and not classified as held for sale in accordance with MFRS 5; and  (d) when the cost model is used, the fair value of property, plant and equipment when this is materially different from the carrying amount. Therefore, entities are encouraged to disclose these amounts. Transitional provisions 80 The requirements of paragraphs 24–26 regarding the initial measurement of an item of property, plant and equipment acquired in an exchange of assets transaction shall be applied prospectively only to future transactions. Effective date 81 An entity shall apply this Standard for annual periods beginning on or after 1 January 2005. Earlier application is encouraged. If an entity applies this Standard for a period beginning before 1 January 2005, it shall disclose that fact. An entity shall apply the amendments in paragraph 3 for annual periods beginning on or after 1 January 2006. If an entity applies MFRS 6 for an earlier period, those amendments shall be applied for that earlier period. MFRS 101 Presentation of Financial Statements (IAS 1 Presentation of Financial Statements as revised by IASB in 2007) amended the terminology used throughout MFRSs. In addition it amended paragraphs 39, 40 and 73(e)(iv). An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies MFRS 101 (IAS 1 revised by IASB in 2007) for an earlier period, the amendments shall be applied for that earlier period. 81A 81B 582  © IFRS Foundation MFRS 116 81C MFRS 3 Business Combinations (IFRS 3 Business Combinations as revised by IASB in 2008) amended paragraph 44. An entity shall apply that amendment for annual periods beginning on or after 1 July 2009. If an entity applies MFRS 3 (IFRS 3 revised by IASB in 2008) for an earlier period, the amendment shall also be applied for that earlier period. Paragraphs 6 and 69 were amended and paragraph 68A was added by Improvements to MFRSs (Improvements to IFRSs issued by IASB in May 2008). An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies the amendments for an earlier period it shall disclose that fact and at the same time apply the related amendments to MFRS 107 Statement of Cash Flows. Paragraph 5 was amended by Improvements to MFRSs (Improvements to IFRSs issued by IASB in May 2008). An entity shall apply that amendment prospectively for annual periods beginning on or after 1 January 2009. Earlier application is permitted if an entity also applies the amendments to paragraphs 8, 9, 22, 48, 53, 53A, 53B, 54, 57 and 85B of MFRS 140 at the same time. If an entity applies the amendment for an earlier period it shall disclose that fact. 81D 81E Withdrawal of other pronouncements 82 83 [Deleted by MASB] [Deleted by MASB]  © IFRS Foundation 583 MFRS 116 Deleted IAS 16 text Deleted IAS 16 text is produced for information only and does not form part of MFRS 116. Paragraph 82 This Standard supersedes IAS 16 Property, Plant and Equipment (revised in 1998). Paragraph 83 This Standard supersedes the following Interpretations: (a) SIC-6 Costs of Modifying Existing Software; (b) SIC-14 Property, Plant and Equipment—Compensation for the Impairment or Loss of Items; and (c) SIC-23 Property, Plant and Equipment—Major Inspection or Overhaul Costs. 584  © IFRS Foundation

Meaning of Life and Success Essay

Success is a person or thing that desired aims and achieves or attains fame or any form of accomplishment which will always make them proud or happy at the end of either the day, month or year. The word success was originated in the mid-16th century from a Latin word successus and a verb succedere meaning come close after. When I hear of the word success there are two things that come in mind, hard work and determination. Hard work is one of the main and most important building blocks in my success foundation. Working hard is one of the best and most accurate ways to think about being successful. Success cannot be earned unless you strive and work hard for it, because it is a word that comes with work and if work is not done then the meaning of the word can’t be accomplished. Like Einstein said â€Å"If A is a success in life then A equals x plus y plus z. work is x; y is play and z is keeping your mouth shut† for instance to me as an athlete working hard and in playing hard rather than running my mouth are the best way of being successful in game point stands in my career. Determination is a very critical and important aspect when it comes to success. To be determined to achieve any goals or aims is a very important choice of being successful. Bertrand 2 Determination can to be physically, spiritually and emotionally which all combines with hard work and if you combine both hard work and determination together you will always get a good result of success. Being successful in life can be one of the precious and happiest moments in life that can last for a long time if and only if you do what is expected of you to keep the success going on. Success can be advantageous in many ways; Accomplishing a goal, moving on to a new goal, brings happiness and fulfillment, set new and personal records, inspire, motivate and give you strengths to aim high and set bigger goals. But it’s not always everybody that’s successful that is happy or satisfied with their success. The isn’t that much difference being successful than being a failure, like the good old quote that say â€Å"the difference between a successful person and others is not a lack of strength not a lack of knowledge, but rather the a lack in will† this quote is very simple and well understood and the quote’s point is clearly pointed out, which state the main difference between a successful person and others which is the will to be the successful person that they are. To be successful person there should be some sought of guidelines to help you achieve or attain success. Thinking about success also brings about the thought or idea of failure â€Å"In order to success your desire for success should be greater rather than your fear of failure†. An important and inspiring quote as this from one of the favorite, idol and inspiring actor in the movie industry and in the society should and is been considered by a lot of fans to be very important in achieving success rather than having the fear of failure because his path of success has given or got him to where he is at the moment.

Australia’s legal system

Australias legal system Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Law Essay Writing Service . You can view samples of our professional work here . Australia’s legal system Australia’s legal system also known as ‘Common law system’ is based on the model which was inherited by those countries whose development was influenced by British Colonialism in particular the commonwealth countries and the U.S. Under the Australian legal system all people whether domestic or international are treated equally before the law and safeguards to ensure the unfairly judgment by government or officials. Australian courts work on ‘adversarial’ system, which innate within the English legal system. This system comprise of two parties presenting their case against each other, where the third party known as judge or magistrate presides the case directly. Whereas in the adversarial system, witness is not handled by the judge directly. The judge listens to each side’s discussions and after the cross-examination of witnesses by both sides then only the judge makes the decision. But in other countries like France In France, ‘inquisitorial’ system of courts operate, where the judge plays an active role in examining evidence and questioning witnesses. The Australian Constitution Australia operates in a constitutional monarchy. At a federal (Commonwealth) level, the first institution of law in Australia is the Commonwealth Constitution. The Constitution comprise of rules which controls the power, authority and operation of a Parliament. In Australia, each State has its own constitution. The Commonwealth Constitution consists of federal government, the federal parliament, and the federal courts, the territories, and the creation of new states. Thus, the Commonwealth Constitution is the fundamental document of empowerment in the Australian political and legal systems. It establishes that, where the Commonwealth and a State pass conflicting laws, any valid Commonwealth law trumps (overpowers) the State legislation. States can pass laws on any subject matter. The federal govern ment has the power to enact legislation about certain areas given by the Constitution. In activities such as marriage, immigration and taxation the Commonwealth has the power to order the law. But in the buying and selling of property and criminal laws constitutional capacity of the Commonwealth Parliament could not do anything. Division of Powers â€Å"The law making powers which are not stated in the constitution as belonging to the commonwealth remains with the state†. A federation involves a division of powers between the constituent elements in Australia that is between the States and the federal body, the Commonwealth of Australia. One of the most important roles of the constitution is the division of powers between the Federal and state legislatures. The constitution confers a limited number of exclusive powers such as defence, foreign trade and immigration etc but most of the Commonwealth’s powers, granted under s. 51, are concurrent powers. These powers can be exercised by the Commonwealth and the states but, in the event of conflict, the Commonwealth law will prevail (s. 109). Powers which are not expressly mentioned in the Constitution, residual powers remain with the States. Seperation of powers Governing Australia needs lots of power. The Constitution says that this power is divided between three groups of people so they can balance each other. Each group checks the power of the other two. This division of power stops one person or group of people taking over all the power to govern Australia.

Revisions Thesis Example | Topics and Well Written Essays - 750 words

Revisions - Thesis Example arch has studied if existing immigration and border control systems are enough to prevent illegal immigration, as well as existence of psychological and logical aspects related to the illegal immigrants and immigration to use them as a tool to infiltrate terrorists to the USA Since the discovery of the continent, everyone other than Native Americans, who are living in the US, are descendant from immigrants and slaves. By the late seventeenth century, nonnative individuals formed seventy-five percent of the American population (History of Immigration Law in the USA). At first, the U.S. government promoted wide-open immigration in the pursuit of settling as much territory as possible. However, after the Civil War different states began to adopt their own immigration statues. In 1875, US Supreme court brought the immigration laws under federal jurisdiction. In 1891, US Congress established Immigration Service (History of Immigration Law in the USA) and started implementing immigration laws. Early immigration laws were designed to control US population structure. For example, 1790 Naturalization Act limited European and Caucasian descendent immigration, 1882 Chinese Exclusion Act made immigration from China illegal. Likewise, ethnicity, the government was al so worried about moral composition of the US population. Congress, between 1872-1890 passed laws constraining the immigration of several groups that included prostitutes, criminals, mentally ill, and financially unstable individuals. In the late 19th century, the government became concerned about native laborers. In 1885 and 1887, Congress passed first laws restricting immigration based on economic reasons. Congress during 1900 to 1921 instituted a â€Å"quota system† guaranteeing permission to a set number of individuals from each ethnic group. In 1924, Congress established the first branch of border control to monitor immigration from Canada and Mexico (History of Immigration Law in the USA). In

Asset Classification Policies and Procedures Essay

Asset Classification Policies and Procedures - Essay Example Asset Classification Policies and Procedures For information to be handled properly, employees are required to have a working knowledge of the categorization of information into the three provided categories. Employees should be able to categorize the information before forwarding it further. If at some point, employees are confused about properly categorizing the information, the proper course of action is to classify it as confidential while an appropriate supervisor would later review and properly classify. Public Data- As the name suggests, such data is usually open to the public and is easily available. Disclosure of such data does not put the firm in any kind of risk; however certain controls are required to be enforced on such data to prevent modification or destruction of the data by unauthorized parties; Sensitive Data- Data is classified as sensitive data when disclosures of such information publically can result in potential risk for the organization or its people. Such information may be provided to others on a discretionary basis and under the supervision of the data owner. Confidential Data – Confidential data is the most sensitive data within the organization and unauthorized disclosure of such information can result in significant risk for the firm. The highest level of security and control are applied on such information. The System Impact level will determine the impact of activities on the system on a scale of one to five with five being the most crucial impact and one having the least crucial impact.

International hospitality management Essay Example | Topics and Well Written Essays - 750 words

International hospitality management - Essay Example This was followed by hotels, motels, and Inns. The first hotel can be traced to City hotel in New York City in 1794 which started with 73 rooms (Schonwalder, 2000). Apart from accommodation, the hotel offered meetings rooms and soon became the social center of the city. This was the first building in America built especially to be a hotel. The first five star hotel was the Tremont House in Boston, built in 1829, which marked the beginning of first class service. The Hilton International The Hilton International started its journey in 1919 by Conrad Hilton when he took over a property in Texas. Its international arm, Conrad Hotels, had locations across Australia, England, Ireland, and Egypt among many others. By 1940 the group owned a chain of premium hotels worldwide but in 1960 it sold its international operations. In 1989 it also relinquished interests in its gaming companies and focused on core hotel business. Focusing on contracts and franchising, today Hilton Hotels Corporation is a leading hospitality company that owns, manages, and has franchised over 2000 hotels the country (Funding Universe, n.d.). The well-known brands under its chain include Doubletree, Embassy Suites, Hampton Inn, Homewood Suites, and Harrison Conference Centers. Marriott International Marriott International, Inc., with the spirit to serve, was formed in 1993 (Funding Universe1, n.d.). Before this, they were in the restaurant business but in 1993 they split the company in two – lodging and contract services company, thus marking the beginning of Marriott International, Inc. Marriott International manages and franchises more than 1350 lodging properties under ten different hotel brands across the world. These include the Fairfield Inns and Suites, the Marriott, Ritz-Carlton, Renaissance, and New World brands. Its strategy to manage rather than own property has been found to be paying the Group rich dividends. Global Hyatt Corporation Global Hyatt Corporation, one of the leadin g luxury hotel companies in the world, operates in major and secondary cities, at airport locations and leading resort areas throughout the world (Advameg, 2011). It specializes in deluxe resorts with meeting facilities and special services for the business traveler. The Group manages or licenses the management of more than 210 hotels and resorts (with a capacity of more than 90,000 rooms) in 43 countries around the world. In addition to its core Hyatt Regency brand, it has developed other special concepts like the Grand Hyatt, the Park Hyatt, and Classic Residence. With its property in 1957, Hyatt grew to a chain of 13 hotels by 1969. Conclusion Hotels and chains have grown and developed due to mergers and acquisitions (M&A), which is a common form of strategy and growth in every sector. This is used as a strategy to enhance profitability and survive in the competitive growth environment. Several major mergers and acquisitions took place in the hotel industry between 1979 and 2004 (Quek, 2011). However, M&A activities in the sector need financial support because of the high capital costs involved. Deregulation in the industry helped to generate funds easily which benefited the hotel companies by allowing them easier access to capital. As borders across nations blurred and visitors started traveling overseas for work, the demand for excellent facilities increased. Acquisitions in the hotel sector were done with the

Ten questions, Ethical Issues in sports Assignment

Ten questions, Ethical Issues in sports - Assignment Example Researcher Todd Crosset stressed that his data were limited, but also wrote, "To suggest that all of these cases are simply a result of athletes being targeted because of their high profile status denies reality. The best interests of institutions cannot be served until those working within the institutions admit that a problem exists." Clearly, the universities do not make any effort to recognize a problem, and then to punish their star athletes for their horrendous actions. Without a doubt, student athletes with criminal records should not posses free-ride scholarships for various reasons. A student playing for a university is a privilege and not a right. If a student is immature and lacks decision making skills, then clearly the student does not deserve a free-ride scholarship. Furthermore, a student who is disciplined in his behaviors and ethics deserves a free-ride scholarship more than an athlete who does not value a free-ride scholarship. In this competitive business, agents play the race card in order to retain black athletes. With so much propaganda brewing from the media, playing the race card usually yields success for agents. A classic example of â€Å"playing the card† was portrayed in the trial of OJ Simpson, an ex-football athlete accused of murder as Roger Simon writes, October 1995 â€Å""Why was playing the race card necessary in order for O. J. Simpson to go free? The race card was instilled because it was the only way for the defense to deal with the massive physical evidence against him." This is a tough scenario since these statements are not always made by black and white agents. For instance, if a white agent grew up in a poor town and family, they will say this statement. In a lot of cases, background plays a vital role. Some black athletes are born in prestigious families while most come from poor neighborhoods.

Criminal Justice, What are the affects of victimization on victims and Research Paper

Criminal Justice, What are the affects of victimization on victims and their families - Research Paper Example This is because they and their families experience long lasting physical, emotional and psychological damage after being treated unjustly. Victims sometimes get to suffer from the effects of victimization for the rest of their lives, the greatest effect being psychological in nature according to Hess and Orthmann (28). The effects of victimization can be felt short term or long term. Whatever the duration that it takes, the negative effects of victimization are often difficult to mitigate according to Lerner and Montada (25). Victimized people get confused, frustrated, fearful and angry, at worst going through trauma. They forever want answers as to why they experienced whatever happened and why it happened to them. Despite the victims having knowledge of who did that to them and where to go to get help and justice, they always fear and feel insecure. This is because they may not know who to trust and rely on for help and support. Victimized persons and their families suffer a lot physically, psychologically, emotionally and financially (Lerner and Montada 32). Furthermore, they are sometimes over burdened by the complexity of the criminal justice system. People who are victimized many times find it very difficult to believe and accept that they have become victims of crime and that there is nothing they can do about it. Initially, they make themselves believe that the crime occurred in their dreams and not in reality hence they live in great denial. These reactions may last for some months or even years depending on how traumatized a victim is according to Lerner and Montada (54). It is common for victims to act like children and get taken care of by other people surrounding them. Victims get emotions like anger, guilt, grief, shame, confusion, frustration and fear. Some victims get angry with their offenders, family members, friends, service providers, the criminal justice system and even themselves. Victims have a strong desire to get even and bring

Issues in global economy Essay Example | Topics and Well Written Essays - 2000 words - 1

Issues in global economy - Essay Example . Doctrine of invisible hand as also reflected in the thought of Adam smith mainly talked about the power of market economy over the state governing economy. He spoke about market mechanism that ultimately leads to the equilibrium. Any gap between demand and supply will be automatically adjusted through the mechanism of market. The role of government here is nothing but to facilitate the process.   Breaking of Soviet Union in the 20th century strengthens this thought of ‘power of market over state’. This thought was the founding stone of today’s globalization and global economy. However the economists and the historian thought that there are many factors those facilitated the process of globalization. According to them, in 19th and 20th century many countries across the world faced the European imperialism that first makes them known about the world economy. Besides this the period saw a rapid development of sophisticated technologies that was never seen before. Rising of machine gradually cleared the new methods of reaping more profit. All this factors was seeking a process through which they could merge for functioning global economics, trade and politics. The stage was prepared for processing of the global issues through the hand of the ‘process of globalization’. With respect to recent period there emerge some more aspects that control and assist the globalization process more rapidly. Today the progresses of international trade are mostly dependent on international commercial agreements such as FTTA, CAFTA, NAFTA etc. Such agreements have opened the door to the northern export and give more opportunities to the developing nations. Nowadays the export processing zones operate as productive vicinities for overseas ventures, investments and employments. These zones are playing their role in many ways to support the economies by

Learning & Cognitive theories Essay Example for Free

Learning Cognitive theories Essay Learning in my life is an ongoing process; one that carries on as I come across various situations, every single one of them increasing my learning experience. It is rightly said that learning starts the day one is born and continues till one’s death bed. So in this respect there have been various stimuli that have repeatedly crossed my life. I have made several associations with different kinds of objects or situations for that matter which I have remembered and used to make various inferences. Who does not remember the jingles of the ice cream man, stimulating and beckoning the kids to crave for ice cream and inquire for money from the parents? Out of the many situations, one that has truly left an indelible impression on my mind is a childhood recollection of the horrific car accident that I went through with my family. Although I came out unscathed from the accident as did my family who just suffered minor injuries, the very thought of screeches of a car just triggers a whole array of thoughts and nightmares of my accident ordeal. It was a fine day with no unusual surroundings or conditions of the highway. Our car was also going at a steady pace maintaining the speed limits. The car was functioning well with every smallest detail of the car scrutinized by my father, a perfectionist at work. But as it happened that the heavy truck two cars in front of ours carrying logs of wood, its lock that fastened the logs broke free from its bolt which sent the logs tumbling down. This is what I last remembered out of my flashbulb memory, besides the incessant screeches and the wails of the people struck by this horrific incident. It is from that moment onwards that I shudder at the slightest screech of a car so much so that I cannot even stand my friends drifting their modified cars, much to their surprise and disgust. Such a fear that I have developed is largely due to that horrific incident that I went through. This has set a feeling or a sensation at the back of my mind about staying away from fast cars on the roads. I can attribute my fear to the concept of classical conditioning wherein an unconditioned stimulus (screech of a car) has turned into a conditioned stimulus. That conditioned stimulus sets off a conditioned response (fear of an accident). The concept of classical conditioning says exactly that learning is associated with a person responding to a neutral stimulus which normally does not bring about that response. So more often that not whenever I come across and hear a screech I relate it with a fear that somebody will have an accident. If I had not experienced that accident, such a screech of a car would not have meant anything abnormal or out of the ordinary. Such a behavior of mine can also be explained by the concept operant conditioning where a person learns a voluntary response and the extent of it is strengthened or weakened depending on its positive or negative consequences. In my accident scenario, the accident is a negative consequence which I associate with a screech of a car. So the screech or a high speed develops the fear and reinforces it as well. Such reinforcement may happen if somebody in my family also has an accident on a highway or I myself get into an accident. The reinforcement has also stemmed from media which has also done a sufficient bit to sustain my fear of car accidents. One can usually see in the car chases in the movies where the bad guys being chased by the cops or police in their cars get into accidents and get busted. There are several other instances where certain programs reinforce my fear of speeding and screeching cars like the reality car shows. They show cars getting into horrific and deadly accidents as the drivers over speed their vehicles. There is another approach to learning which is called cognitive social learning. One such learning is latent learning. In this type of learning a new behavior does not get registered properly though it is acquired till one receives reinforcement encouraging one to adopt or develop a behavior. But in my accident scenario, I can largely put it down to classical conditioning. This is where I have started making associations with certain stimuli which in turn leads to the development of fear. Reference ATHERTON J S (2005) Learning and Teaching: Cognitive theories of learning http://www. learningandteaching. info/learning/cognitive. htm Accessed: 2 February 2009 Frietas, S Neumann, T. (2009). The use of exploratory learning for supporting immersive learning in virtual environments. Computers Education Moriyama, J Kato, Y. (2009) Self-efficacy and learning experience of information education: in case of junior high school. AI Society

Human Resource Management in the FMCG Industry

Human Resource Management in the FMCG Industry Human resource management (HRM) is that part of management process which makes, enhances, manages and develops the human element of the enterprise measuring their resourcefulness in terms of talents, abilities, total skills, creative, knowledge, and potentialities for effectively contributing to the organizational objectives. Human resources are precious and a source of competitive advantage. Human resources may be tapped most effective by mutually standard policies which promote promise and foster an inclination in employees to act flexibly in the interests of the adaptive organizations pursuit of excellence. Human resource policies can be joined with planned business and used to reinforce appropriate culture. Human resources play a critical role in enabling the organization to effectively deal with the external environment challenges. The human resource management has been accepted as a strategic partner in the formulation of organizations strategies and in the implementation of such strategies through human resource planning, employment, training, appraisal and rewarding the personnel. Strategic management of human resources facilitates creation of competitive advantage for the organization over its rival by building unique human resource based competence. An organizations recruitment, selection, training, performance management process and compensation practices can have a strong influence on employee competence. Company output increase if the management can hire more experience well qualified candidate. Performance appraisal takes in account the past performance of the employees and focuses on their improvement for the future performance of the employees through counseling, coaching or training. The human resource strategy of a business should reflect and support the corporate strategy. An effective human resource strategy includes the way in which the organization pans to develop its employees and provide them with suitable opportunities and better working conditions so that their optional contribution is ensured. This implies selecting the best available personnel, ensuring a fit between the employee and the job and retaining, empowering and motivating employees to perform well in the direction of corporate objectives. Statement of Purpose Consumer packaged goods (CPG) Organization, alternatively called as FMCG industry mainly deals with the production, marketing and selling of consumer packaged goods. The FMCG or Fast Moving Consumer Goods are those goods which are generally consumed at a regular interval by the consumers. FMCG industry has some of the main activities like financing, selling, purchasing, marketing etc. The industry also contributes or also involved in general management supply chain, operations and production. FMCG industry gives a variety of consumables and consequently the amount of money is very high which is circulated against FMCG products. Day by day the competition between the FMCG producers is increasing consequently the investment in FMCG industry is increasing. FMCG Sector in India is estimated to grow at a very high rate by 2012. PRIME FMCG PRODUCTS Some general FMCG product categories include dairy products and food, drinks, coffee, tea, tobacco and cigarettes, glassware, paper products, pharmaceuticals, dry cells, electronics, prepacked food products, plastic goods, watches, greeting cards, soaps, printing and stationery, household products, detergents, photography, drinks etc. In FMCG industry some of the features which made this organization as a strong distribution networks are small operational cost, as a prospective one, presence of renowned FMCG companies. Population growth is also one of the major factors behind the success of this industry. Introduction GOOD FOOD, GOOD LIFE NESTLE is a very popular brand in all over the world. It basically supplies packaged food. It was established and has headquartered in Vevey, Switzerland. Nestle was established in 1905 when the two companies was merged. The first company was established in 1866 by Page Brothers to produce milk products and their company name was Anglo-Swiss Milk Company in Cham, Switzerland and the second one was Farine Lactà ©e Henri Nestlà © Company to supplies an infant food product set up in 1867 by Henri Nestlà ©. Nestlà ©s have a trademark (birds in a nest), derived from Henri Nestlà ©s personal coat of arms, evoke the values upon which he founded his Company. Nestlà ©s have their no. of brands which are well-known worldwide; list of all the products has made the company a international market master. Some of their famous products are coffee, chocolate, ice cream, confectionery, milk, pet food bottled water. FAMILY OF NESTLE Family of NESTLE consists of products related to: Milk Nutrition Beverages Prepared dishes cooking aids Chocolates confectioneries NESTLE is one of the well known FMCG company. In the Every part of the world, the Nestlà © name represents a commitment or promise to the customer that the product is of high standard and safe. NESTLE support the UNGC (United Nations Global Compacts). UNGC guiding principles on human rights, their aim and labour to offer an example of better labour practices and human rights all over his business activities. Nestle people played a major role for his success. Nestle people give the equal respect and dignity to each other and expect from the every employee to share and contribute their opinions and views to improve Company personal development and results and also promote a sense of personal responsibility. Nestle recruit motivated and competent people, who know and respect our values, provide equal opportunities for their advancement, development, protect their privacy and do not tolerate any form of discrimination or harassment. Human resources of an organization can provide it with a reasonable advantage over its competitors in the fast changing environment. This calls for the strategic management of human resources for the accomplishment of corporate objectives. STRATEGIC HUMAN RESOURCE MANAGEMENT is called as the linking of strategic goals with human resources. No. of objectives in order to enhance or to develop an organizational culture, to improve organization performance and that fosters flexibility, innovation, and sustainable competitive advantage is called. HRM practices of an organization give its an edge over its competitors, thereby leading to strategic human resource management. KEY FACTORS OF SHRM PROCESS The outcomes of the Strategic Human Resource Management (SHRM) process which should be evaluated both qualitatively as well as quantitatively. The business strategy it alters and is altered by the SHRM process and which provide the business a good thought of direction. The external environment which is flexible and dynamic in the present global business scenario. The internal environment The general culture and the organizational context which is prevalent in the organization. VISUAL DEPICTION OF THE SHRM PROCESS HUMAN RESOURCE MANAGEMENT WITH BUSINESS OUTCOME STRONG AND FOCUSED VISION HUMAN RESOURCING OPEN COMMUNICATION PERFORMANCE APPRAISAL CHALLENGES AND ADVENTURES SHARING OF INFORMATION SHAPING THE WORKING CULTURE CONTINUOUS DEVELOPMENT STAGES OF STRATEGIC HRM PLANNING PROCESS Strategic human resource management is the process by which managers design the mechanisms of an HRM system to be reliable with each other, with the organizations plans and goals and with other essentials of organizational architecture. The main role of strategic HRM is the improvement of an HRM system that increases an organizations awareness, worth, invention, and productivity to customers. Strategic human resource planning (SHRP) involves four distinct stages: Situational analysis/environmental scanning. Estimating demand for human resources. Analyzing the supply of human resources. Developing action plans to close any gap between human resource demand and supply. The first stage of HR planning is the point at which strategic planning and HRM interact. HR planners anticipate sources of threats and identify and should drive the organizations strategic planning and opportunities with the help of Environmental scanning. The strategic ideas or plan implement to environmental circumstances, and HR planning is the mechanisms that an organization can use to accomplish this adaptation process. The second stage, forecasting demand, requires estimating not only how many but also what kinds of employees will be needed by the organization. The demand for employees should be closely tied to the strategic direction of the organization. Forecasting yields advance estimates of the organizations staffing requirements. This is a difficult task, especially for organizations in rapidly changing environments. Four forecasting techniques include expert estimates, trend projections, statistical modeling, and unit-demand forecasting. Estimate by no of expert, a group of experienced or expert provides the organization with demand estimates based on subjective assessments of available economic, intuition, prior experience, and labor force indicators. Trend projection involves forecasting which is based on a previous relationship between the employment and a factor related to employment (e.g. sales levels). Statistical modeling techniques (e.g. regression analysis or Markov analysis) are mor e quantitative forecasting and sophisticated techniques. Unit-demand forecasting requires the unit managers (e.g. department head, project team leader) to analyze the present and future job-by-job, people-by-people needs. The third phase involves studying the number and types of current employees in terms of the training and skills necessary for the future and also the supply of capable workers in the outside labor market. The skills inventory is a major tool used to assess the internal supply of employees. A skills inventory is a list of names, skills and characteristics of the people currently working for the organization. The list of skills coded into the skills inventory should be tailored to the needs for the organization, but might include such factors as level and field of education, knowledge of a foreign language, professional qualification or certification, or licenses held. The organized inventory provides a way to acquire these data and makes them available as needed in an efficient manner. Also important is the need to maintain the inventory so that information is kept current. With regard to the external labor market, the entire country (or world) may be the relevant labor market for hig hly skilled jobs. For unskilled jobs the relevant labor market is usually the local community. After the HR planning system has analyzed both the supply of and the demand for future workers, the two forecasts are compared to determine what, if any, actions are necessary. If a discrepancy exists between the two estimates, the organization needs to choose an appropriate course of action designed to eliminate the gap. The organization has a number of options available when the demand for workers is greater than the supply of workers. The organization might elect to use overtime work with current employees, increase training and promotions of current employees, or recruit new employees. In tight labor markets, the availability of labor is limited (i.e. demand exceeds supply), driving up the price of those employees who are hired, and limiting the extent to which the organization can be selective in its hiring procedures. In a loose labor market, qualified employees are abundant. When the supply of workers exceeds demand, alternative solutions include attrition, early retirements, demotions, layoffs, and terminations. STRATEGIC HRM AT NESTLE Nestlà © aims to increase the business, list of customers, profits and sales but, at the same time, to improve the Standard of living everywhere it is active and the quality of life for everyone. Nestlà © is also convinced that nestle employees is the strength of the Company and it is impossible to achieved without their energy and their commitment, which makes people its most important asset. Involvement of people and also showing their interest at all levels starts with the basic and appropriate information on the Companys activities and also on the specific aspects of their work. Through shared their views, ideas and communication and focused vision, everyone is invited to share and contribute there opinions and views to improvements enhancing Company personal development and results. Currently human resource is the term which is in demand of every organization. By using the HR policies companies are able to describe the combination of organizational management personnel functions with achievement, Knowledge, relation between employees, employees experience and how to utilize resource at different levels. PURPOSE By using the HR policies an organization can be transparent with their employees on organization environment Employee expectation from the company Company expectation from their employees What are the company policies and how the polices apply. What are the acceptable behavior What is the behavior of the workforce that cant be accepted? The policies are basically used to help an organization to explain that it reach the requirements for training, variety, principles. If an Organization want to fire any employee in this case it may be necessary for the organization to show the reason of the complaint with the employee contract and also all the others legal documents. HR management policies are important for those companies that do not want and personnel issues in future. Complete HR solution which covers human resource policy solutions, evaluation services, professional human resource advice and job description writing given to the customers. Common Sense would seem to dictate the necessity of having written policies and procedures covering all aspects of the employee/organization relationship. Yet, there are organizations with few or no written policies. In fact, there are organizations that have never considered developing policies and procedures-written or otherwise. There are organizations with written policies and procedures that read well but have no relationship to the needs of the organization/company or employees. There are organizations with elaborate sets of policies and procedures that no one seems to read, let alone follow, and there are organizations that appear to use their policies and procedures primarily as rules for identifying and punishing infractions. In actuality, HR policies- Provide clear communication between organization/company and its employees regarding conditions of employment. Form a basis for treating all employees fairly and equally. Are a set of guidelines for supervisors and managers. Create a basis for developing employee handbooks. Establish a basis for regularly reviewing possible changes affecting employees. To fulfill all these purposes and objectives, Policies should: Be clear and specific, but provide adequate flexibility to meet changing conditions. Comply with all appropriate federal and state laws and regulations. STEPS FOR SHRM Job Design Recruitment Selection Training Development Pay structure Benefits Performance Management Rewards and Incentives Maintenance: Welfare JOB DESIGN: Job design refers to the way the tasks are combines to form a complete job. Job design is a process which joins the intrinsic and extrinsic relationship, tasks, and the candidate experiences and educations required like knowledge, qualification, skill and capabilities for every type of task that meet the requirements of organization and employees. The job design under NESTLE is a very detailed and based on strategic process. The company incorporates practices like Job Enrichment and Job Enlargement, to motivate employees and to break the monotony of their job tasks. The correspondent herself works in both sales and brand management departments, which is an example of job enlargement. Nestle HR policy- Nestle group used this policy to covers those rules which create a sound basis for well-organized and active HR Management around the world. 2. RECRUITMENT SELECTION: Recruitment is the process of developing and maintaining adequate manpower resources. Recruitment is basically a process to select the interested candidates and divide the candidates in different- pool of prospective employees, so that the recruiters are able to select the right candidate from this pool. The recruitment process at Nestle is clearly defined. People with qualities like dynamism, realism, loyalty, pragmatism, hard work, honesty and reliable. Match between candidates values companys culture. Recruitment for management levels takes place in the head office and all others at the branch level. The existing employees are promoted to higher posts as per the requirements. There are no lateral recruitments. Another source of recruitment is campus placements and human resource consultancies. Selection-Combination of written test, GD interview (Interviews for top Management posts). 3. TRAINING DEVELOPMENT: Training is a major and also an important part of organized activity for increasing the skills and knowledge of people and also to understand the deep knowledge of task that what they have to perform or for a definite purpose. It involves systematic procedures for imparting technical know-how to the employees so as to increase their knowledge and skills for doing specific jobs with proficiency. From the Company floor to the upper management, training at Nestlà © is continuous. Nestlà © people provide this training and it is constantly appropriate to the professional life. Nestle provides the following- Literacy training-to upgrades essential literacy skills, especially for workers who operate new equipment (Mission-directed Work Team Approach). Employees are also sent abroad to study markets, consumer tastes etc. Nestle Apprenticeship Programmes. Local Training Programmes-on issues ranging from technical, leadership, and communication and business economics. Employees are also sent abroad to study markets, consumer tastes etc. Nestle people development review- this policy throws light on Nestlà ©s culture and core values, different training programs and life of employees after work. Nestle leadership and management principles- it describe the management style and the corporate values of the Nestlà © Group, specifically in the area of interpersonal relations. 4. PAY STRUCTURE: Pay Structure is basically used to set the salary structure of the employees according to the level of job, or group of jobs and also consider basic salary, overtime and bonus. We can also call pay structure as salary structure. Nestle strives to offer fair remuneration. Remuneration level is above the average in industry. The variable component of the salary is comparatively big to reward individual Performance. In case of higher management level, the variable part is linked to individual team target achievements. 5. BENEFITS: Nestle offers no. of benefits to their employees to fulfill their expectation like Health insurance for his and his family members, PF, reimbursements (Car, Phone) etc. Take all the necessary steps for the protection of the employees during work with Nestle. The following benefits are provided to all employees, with no discrimination- Leave-Personal Medical (fixed no. per year) Children Education Assistance Scheme Provident fund Retirement Gratuity Scheme Group Insurance Accidental Insurance Scheme Conveyance Reimbursements Residential Accommodation Monthly health check-ups free consultation for self family etc. 6. PERFORMANCE MANAGEMENT: Performance management includes all standard procedures used to appraise contributions, potentials and personalities of group members in a working organization. It is a process which is important for making accurate and impartial decisions on employees for secure information. At Nestle performance appraisals of Employees are done in order to understand each employees abilities, competencies and relative merit. Formal assessment by Line Managers and HR once a year with feedback. Subordinate can question an unfair evaluation. Specific Key Performance Indicators have been enlisted by the HR department. One of the important key performance indicators is achievement following the Nestle management and leadership principles. Remuneration structure and promotion criteria take into account individual. 7. REWARDS INCENTIVES: it consists of a variety of modules that can be presented to reward employees and identify unique performance. The structure is based on consistent, delivering equitable and fair rewards to a differentiated group to encourage the employees to generate new ideas in improving the workplace productivity and consists of the following non-financial and financial rewards. Passion to Win awards- These quarterly awards have been institutionalized to reward those who over-achieve their targets. Long-service Awards- To recognize employees who have been with the company for more than 30 years. Nestle Idea Award- It was found from the correspondent that the company institutes Nestle Idea Award every quarter to recognize and award employees who come up with relevant and innovative ideas which have the potential of being implemented at Nestle. 8. MAINTENANCE A) EMPLOYEE RELATIONS: Employee Relations involves the body of work concerned with maintaining employer-employee relationships that contribute to satisfactory productivity, motivation, and morale. Essentially, Employee Relations is concerned with preventing and resolving problems which arise out of or affect work situations. Nestle provides a very healthy working environment which is one of the reasons why Nestlà ©s employees state their commitment level to be very high. Employee turnover is less than 5%., which is considered to be very low for a Multinational Corporation. Nestle has a open culture upward communication especially in case of grievance redressal. Work/Life balance is given importance, as illustrated in the Nestle Human Resource Policy document. Nestle Family annual events are organized by their HR department whereby employees along with their families are invited. Emphasis is laid on safety of employees (Nestle Policy on Health and Safety at Work). B) SAFETY HEALTH: Risk assessment must be required in an organization to identify any type of miss happening or danger in the workplace and should be able to identify or known the steps to be taken to handle the condition. The Nestle Operational Safety, Health and Risk-Management Strategy document illustrates that: Nestle is dedicated to safe healthy work environment. Regular safety assessments audits take place by internal external bodies. CHANGE MANAGEMENT Nestle has adjusted to the ever-changing external environment for the last 140 years since its inception 1866 without losing its fundamental views and fundamental values. It manages Change and drives sustainable profitable growth by following the policy of making gradual changes instead of making drastic and risky changes. ERP implementation- In June 2000, Nestle SA signed a contract of $200 million with SAP with additional $80 million for maintenance and consulting to install an ERP system for its global enterprise to maintain centralize a multinational that subsidiaries in 80 countries and have owns 200 operating companies. While the ERP system was likely to have long-term benefits, the project touched the corporate structure and culture. The structure was decentralized, and it tried to centralize it. This was initially opposed by employees but with subsequent measures taken by the HR like training etc., this has been successfully implemented. CONCLUSIONS AND RECOMMENDATIONS The Model employed by Nestle is one of High Performance, High involvement and high commitment. Nestle is unique in the sense that it has been able to successfully inculcate its business objective as well as its core values, consistently in its employees day-to-day activities starting from recruitment till continuous performance appraisals. Like, open and flexible culture is ensured by way of providing training programs to employees at all the levels. This kind of culture is also supported by decentralized structure of Nestle. Transparent performance appraisal systems and the freedom given to them to question their seniors benefit not only the employees but even the organization as a whole. Nestles emphasis on individual achievement is evident from the kind of pay structure HR has designed for its employees. Need to develop consultation/awareness program to assist the employees for their better understanding of the policies. More incentives should be offered to the employees who provide continuous services to the organization. Nestlà ©, maintain their essential principles and fundamental value from their past historical experience from village operation to the international leading food company which is important for long-term achievement and success. Nestle used HR policies from the last many years and as the company size is growing, increase the difficulty to a dimension which make the demands of research and development of its organization. Nestle motivation is depend upon the willingness to understand and to put query about what why it is doing it, along with respect to Nestlà © values, will guarantee its victory.