Tax-Optimal Step-Up and Imperfect Loss Offset

In the field of mergers and acquisitions, German and international tax law allow for several opportunities to step up a firm's assets, i.e., to revaluate the assets at fair market values. When a step-up is performed the taxpayer recognizes a taxable gain, but also obtains tax benefits in the form of higher future depreciation allowances associated with stepping up the tax base of the assets. This tax-planning problem is well known in taxation literature and can also be applied to firm valuation in the presence of taxation. However, the known models usually assume a perfect loss offset. If this assumption is abandoned, the depreciation allowances may lose value as they become tax effective at a later point in time, or even never if there are not enough cash flows to be offset against. This aspect is especiallyrelevant if future cash flows are assumed to be uncertain. This paper shows that a step-up may be disadvantageous or a firm overvalued if these aspects are not integrated into the basic calculus. Compared to the standard approach, assets should be stepped up only in a few cases and - under specific conditions - at a later point in time. Firm values may be considerably lower under imperfect loss offset.

eLEARNING - A CHANCE FOR SMALL AND MEDIUM SIZED ENTERPRISES

eLearning through its flexibility and facility of access is seen as a major enabler of lifelong learning (LLL), as a catalyst of change and a chance for small and medium-sized enterprises (SMEs) to improve their business and to integrate into European market. But so far the eLearning in the context of vocational educational training has been mainly adopted by large enterprises, while only little activity can be observed in SMEs. The question arises what the chances and challenges for SMEs are and what is the experience with its usage. In this paper after a presentation of key issues in eLearning chances and challenges of eLearning for SMEs are discussed and experiences are exemplified by three EU-funded eLearning projects. The focus lies on the ongoing project ARIEL - Analysing and Reporting the Implementation of Electronic Learning in Europe - coordinated by the Institut Arbeit und Technik (IAT).

The Impact of Western Social Workers in Romania - a Fine Line between Empowerment and Disempowerment

Ideally the social work profession promotes social change, problem solving in human relationships and the empowerment and liberation of people to enhance their well-being (IFSW 2004). The social work practice, however, often proves to be different. Social workers are always in the danger to make decisions for their clients or define problems according to their own interpretation and world view. In quite a number of cases, the consequence of such a social work practice is that the clients feel disempowered rather than empowered. This dilemma is multiplying when western social workers get involved in developing countries. The potential that intervention, with the intention to empower and liberate the people, turns into disempowerment is tremendously higher because of the differences in tradition, culture and society, on the one side and the power imbalance between the ‘West’ and the ‘Rest’ on the other side. Especially in developing countries, where the vast majority of people live in poverty, many Western social workers come with a lot of sympathy and the idea to help the poor and to change the world. An example is Romania. After the collapse of communism in 1989, Romania was an economically, politically and socially devastated country. The pictures of the orphanages shocked the western world. As a result many Non-Governmental Organisations (NGOs), churches and individuals were bringing humanitarian goods to Romania in order to alleviate the misery of the Romanian people and especially the children. Since then, important changes in all areas of life have occurred, mostly with foreign financial aid and support. At the political level, democratic institutions were established, a liberal market economy was launched and laws were adapted to western standards regarding the accession into the European Union and the NATO. The western world has left its marks also at the grassroots level in form of NGOs or social service agencies established through western grants and individuals. Above and beyond, the presence of western goods and investment in Romania is omnipresent. This reflects a newly-gained freedom and prosperity - Romania profits certainly from these changes. But this is only one side of the medal, as the effect of westernisation contradicts with the Romanian reality and overruns many deep-rooted traditions, thus the majority of people. Moreover, only a small percentage of the population has access to this western world. Western concepts, procedures or interpretations are often highly differing from the Romanian tradition, history and culture. Nevertheless, western ideas seem to dominate the transition in many areas of daily life in Romania. A closer look reveals that many changes take place due to pressure of western governments and are conditioned to financial support. The dialectic relationship between the need for foreign aid and the implementation becomes very obvious in Romania and often leads, despite the substantial benefits, to unpredictable and rather negative side-effects, at a political, social, cultural, ecological and/or economic level. This reality is a huge dilemma for all those involved, as there is a fine line between empowering and disempowering action. It is beyond the scope of this journal to discuss the dilemma posed by Western involvement at all levels; therefore this article focuses on the impact of Western social workers in Romania. The first part consists of a short introduction to social work in Romania, followed by the discussion about the dilemma posed by the structure of project of international social work and the organisation of private social service agencies. Thirdly the experiences of Romanian staff with Western social workers are presented and then discussed with regard to turning disempowering tendencies of Western social workers into empowerment.