The targets are discussed before indicator terminology in this element because they are necessary for understanding some of the indicator terminology. Enterprise development and socio-economic development use the same methodology for calculating the target. The calculation is not clearly articulated in the Codes and is a technical calculation. Read the rest of this entry »
The enterprise development scores are measured with this formula: A = B/C x D
A = the score for enterprise development carried forward to the generic scorecard
B = the value of all qualifying contributions from the date of inception of measurement or the date of this statement
C = the compliance target
D = the weighting points. Read the rest of this entry »
As mentioned above, the target is calculated on the same basis as that of enterprise development. The calculation is not clearly articulated in the Codes and is a technical computation. To avoid repetition, the following constitutes a brief summary of what was communicated under enterprise development.
The target for socio-economic development is 1% of net profit after tax (NPAT). NPAT is easily manipulated through accounting entries, so the Codes use an anti-circumvention approach, outlined below. Read the rest of this entry »
The benefit-factor matrix refers to sector-specific contributions, which are not addressed elsewhere in Statements 700 or 807. There is a definition referring to sector-specific programmes. Although it is not clear whether there is a link between the definition and the reference to sector-specific contributions above, it would appear logical to assume so.
The origin of sector-specific contributions is from previous draft statements. The objective is that sector codes will determine sector- specific socio-economic development contributions as guidance to industry from each sector. Read the rest of this entry »
In a boom, banks will lend more and will seek to create new deposits or issue additional notes. To support these activities, they will have to attract additional reserves. This will lead them to bid up interest rates, as they seek to attract idle reserves from one another and from hoards. In a slump, they will issue less and lend less, and will seek to shed reserves, lowering interest rates. In other words, while long-term average rates are determined by costs and competition, current interest rates reflect the balance of supply and demand in the market. They move pro-cyclically.
This is illustrated by a simple model. On the one hand, the rate of interest (in relation to the rate of profit), is likely to affect investment inversely, and investment, in turn, will have an impact on prices and employment. Changes in prices and employment will call for changes in reserves. Read the rest of this entry »
