ESSnet on profiling: a project centered on «culture» and process ESSnet Workshop in Köln

1. ESSnet on profiling: a project centered on «culture» and processESSnet Workshop in Köln

2. ESSnet on « profiling large and complex MNEs » • Objectives and main features of profiling slide 3 • The “cultural” changes slides 4 to 9 • « Process » changes incoming slide 10 • Consultation, dissemination and future work slide 11 • Annex slides 12 to 15 ESSnet Workshop in Köln

3. ESSnet on « profiling large and complex MNEs »the main objectives of the ESSnet Profiling project As it is presently not possible “to see the whole elephant”, the ESSnet has been assigned to: > describe consistently the same MultiNational Enterprises (MNEs) in all the EU countries => “enterprises” linked between countries through the EGR • > support efficient data collection in SBS, FATS, FDI & if possible in STS => a system of statistical units for all business statistics • > for direct dissemination and for indirect use (National accounts etc) => most statistical productions concerned ESSnet Workshop in Köln

4. ESSnet on « profiling large and complex MNEs »«Cultural» changes in the approach (1): operational & accounts analysisanalysis of structure replaces use of pre-existent units found in admin or legal background; the SUs must have collection capabilities Profiling is a method: • > to analyse the • legal –operational and – accounting • > structure of an enterprise group • > in order to • - establish the statistical unitswithin that group and • - their links and • - the most efficient structures • > for the collection of statistical data ESSnet Workshop in Köln

5. ESSnet on « profiling large and complex MNEs »«Cultural » changes in the approach (2): negociation with MNEs delineation, list, names of “enterprises” built with & agreed by the MNEs. Profiling : > uses the MNEs information system for accounting consolidation > takes the (organisational or management) operating segment as a starting point for delineation of economic “enterprises” (IFRS8), but can differ at the end > with the result that an enterprise is (can be): - a single legal unit (if independant) • - an enterprise group (i.e a set of legal unit under common control) • - a part of an enterprise group. > as “enterprises” are organisational units, theirautonomy(in decision making for allocation of their current resources) is an essential characteristic. ESSnet Workshop in Köln

6. ESSnet on « profiling large and complex MNEs »«Cultural » changes in the approach (3): ESS cooperation to list the SUsfrom bottom-up/national to top-down/global analysis Profiling : • > drops the previous “smallest combination of legal units”which is usually: - national • - bottom-up • - usualy non autonomous as basis of the enterprise; • > uses “a part of an enterprise group” called “global enterprise (GEN)” which is usually: • - top-down • - multinational • - compulsarily autonomous • > and complement it by “truncated enterprises” as national parts of GENs. ESSnet Workshop in Köln

7. ESSnet on « profiling large and complex MNEs »«Cultural » changes in the approach (4):testing ability Is the « enterprise » able to produce structural statistical data ? • > For most EU statisticians, a large change to the usual way: • - from surveying SUs (statistical units), predetermined in the BR, • - to a dialog with MNEs, • - using their common language: the standardised business accounting • > Leads to necessary pre-checkings, from BR staff: • - are the priority variables we need available in the MNE information system at the level of the “enterprises”? • - if yes, are they economically significant? • > The checkings are to be made uppermost at EU level • (then at national level): • - are there theoretically consistent data all over the EU? • - will we be able to gather them consistently from the truncated national parts of the “enterprises”? ESSnet Workshop in Köln

8. ESSnet on « profiling large and complex MNEs »«Cultural » changes in the approach (4) (continued) :Is the « enterprise » able to produce structural statistical data ? • > What are the priority variables to check, (statisticians view)? • - the usual BR variables (to identify, assess the continuity and link different kind of units, split the populations and stratify); • - the SBS variables; as such and as SBS are main providers of NA; • the NA themselves; • - special attention to outward-FATS statistics, that operate at the MNE level on “enterprises” • > How can the MNEs work on checkings (the business view)? • - they ask for a priority list; • - they want this list to be common to all European countries; • - they ask for common questionnaires for priority variables; • - they know better accounting data than any other. • => priority to components of value added (in an accounting shape), the “core variables” ESSnet Workshop in Köln

9. ESSnet on « profiling large and complex MNEs »«Cultural » changes in the approach (5): the languagetalking the business only common language: the « IFRS » • > What are the priority variables to check, (statisticians view)? • - the usual BR variables (to identify, assess the continuity and link different kind of units, split the populations and stratify); • - the SBS variables; as such and as SBS are main providers of NA; • the NA themselves; • - special attention to outward-FATS statistics, that operate at the MNE level on “enterprises” • > How can the MNEs work on checkings (the business view)? • - they ask for a priority list; • - they want this list to be common to all European countries; • - they ask for common questionnaires for priority variables; • - they know better accounting data than any other. • => priority to components of value added (in an accounting shape), the “core variables” ESSnet Workshop in Köln

10. ESSnet on « profiling large and complex MNEs »« Process » changes incoming: networking and platforming « networking » the global and national statistical units • > For the NSI of the UCI country of a MNE, the tasks are: No more registering SUs (statistical units), from admin or legal world, but: • - check the global perimeter of the MNE , • - visit the MNE, • - propose GENs (global enterprises in agreement with the MNE) and TENs, • - link the GENs with legal units (can be “m to n” links), • - test at world level the ability to produce adequate statistics, • - send the resulting TENs to partnering NSIs and discuss with them, • > For the partnering NSIs: • - receive proposed TENs (and links with legal units) from the leader NSI • - validate them (existence, ability, agreement from the national managers) • - accept or re-discuss them with the leader NSI • > Each NSI plays alternatively the 2 roles ESSnet Workshop in Köln

11. ESSnet on « profiling large and complex MNEs » consultation, dissemination and future work • Our project lasts until the end of 2013, now mainly on testing • We try to be in constant coordination with: • - the EGR ESSnet on methodological studies • - the ESSnet project on Consistency • - the EU studies on globalisation (e.g on value chains) and on MNEs • - the Eurostat groups on BR, SBS, FATS, NA etc • - other interested countries (US, Canada, China …) • - international bodies such as OECD, UNECE, etc • We will appreciate your comments: pierre.teillet@insee.fr ----------------------------------------------------------------------- Thank you for your attention ESSnet Workshop in Köln

12. ESSnet on « profiling large and complex MNEs » AnnexCore variables: the highest priority to test ability for SBS & NA: ESSnet Workshop in Köln

13. ESSnet on « profiling large and complex MNEs » AnnexCore variables: reconciliation with the P&L ESSnet Workshop in Köln

14. ESSnet on « profiling large and complex MNEs » AnnexCore variables: where to find the right variables in the financial statement? ESSnet Workshop in Köln

15. ESSnet on « profiling large and complex MNEs » AnnexCore variables: what if a complete balance-sheet for the enterprise? ESSnet Workshop in Köln