The system of Transfer Pricing in a multinational

Transfer prices are used by the majority of firms worldwide when intermediate products or services are transferred within the same organization. These prices are reported as revenue for the selling entity (division, unit, department etc.) and as cost for the buying entity. Nevertheless, transfer prices lead to many disputes among managers in the same organization as transfer prices influence the performance of their entities. In cross-border transactions, transfer prices can be used by firms to reduce corporate taxes and thus, increase total firm profits. In order to fight against this firms’ practice, tax authorities require firms to establish a transfer pricing system in accordance with OECD1 Transfer Pricing Guidelines.

Principles on assessment of costs on standard basis – necessary or proper

The judgement in Hennessey Glass and Aluminium Pty Ltd v Watpac Australia Pty Ltd [2007] QDC 57 McGill DCJ provides valuable guidance for practitioners as to whether a range of particular costs items should be permitted on an assessment on the standard basis, and the amounts which should be allowed for such items. The items in issue included counsel’s fees and fees paid to expert witnesses. The decision also examined GST implications for the recovery of legal costs.

Administrative costs of regulation and foreign direct investment: evidence from Standard Cost Model implementation in non-OECD countries

In recent years both developed and developing countries have experienced an increasing number of government initiatives dedicated to reducing the administrative costs (AC) imposed on businesses by regulation. We use a bi-linear fixed-effects model to analyze the extent to which government initiatives to reduce AC through the Standard Cost Model (SCM) attract Foreign Direct Investment (FDI) among 32 developing countries. Controlling for standard determinants of the SCM, we find that the SCM in most cases leads to higher FDI and that the benefits are more significant where the SCM has been implemented for a longer period.

The experience grading and rating schedule; designed to be a United States standard for measuring fire insurance costs based upon combined experience averages,

Mode of access: Internet.

Investigating international accounting standard setting : the black box of IFRS 6

This paper examines the role of powerful entities and coalitions in shaping international accounting standards. Specifically, the focus is on the process by which the International Accounting Standards Board (IASB) developed IFRS 6, Exploration for and Evaluation of Mineral Resources. In its Issues Paper, the IASB recommended that the successful efforts method be mandated for pre-production costs, eliminating the choice previously available between full cost and successful efforts methods. In spite of the endorsement of this view by a majority of the constituents who responded to the Issues Paper, the final outcome changed nothing, with choice being retained. A compelling explanation of this disparity between the visible inputs and outputs of the standard setting process is the existence of a “black box”, in which powerful extractive industries entities and coalitions covertly influenced the IASB to secure their own ends and ensure that the status quo was maintained

Estimating health related costs and savings from balcony acoustic design for road traffic noise

A multi-faceted study is conducted with the objective of estimating the potential fiscal savings in annoyance and sleep disturbance related health costs due to providing improved building acoustic design standards. This study uses balcony acoustic treatments in response to road traffic noise as an example. The study area is the State of Queensland in Australia, where regional road traffic noise mapping data is used in conjunction with standard dose–response curves to estimate the population exposure levels. The background and the importance of using the selected road traffic noise indicators are discussed. In order to achieve the objective, correlations between the mapping indicator (LA10 (18 hour)) and the dose response curve indicators (Lden and Lnight) are established via analysis on a large database of road traffic noise measurement data. The existing noise exposure of the study area is used to estimate the fiscal reductions in health related costs through the application of simple estimations of costs per person per year per degree of annoyance or sleep disturbance. The results demonstrate that balcony acoustic treatments may provide a significant benefit towards reducing the health related costs of road traffic noise in a community.

Settlement offers on appeal : when might costs be awarded on the indemnity basis?

In Roberts v Prendergast [2013] QCA 89 the respondent had offered to settle the appeal, purporting to make the offer under Chapter 9 Part 5 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). Differing views were expressed in the Court of Appeal regarding the impact in the circumstances of the offer to settle, with the majority concluding that the appellant should pay the respondent’s costs on the standard basis.

Modelling the economic benefits of gold standard care for chronic wounds in a community setting

Chronic leg ulcers are costly to manage for health service providers. Although evidence-based care leads to improved healing rates and reduced costs, a significant evidence-practice gap is known to exist. Lack of access to specialist skills in wound care is one reason suggested for this gap. The aim of this study was to model the change to total costs and health outcomes under two versions of health services for patients with leg ulcers: routine health services for community-living patients; and care provided by specialist wound clinics. Mean weekly treatment and health services costs were estimated from participants’ data (n=70) for the twelve months prior to their entry to a study specialist wound clinic, and prospectively for 24 weeks after entry. For the retrospective phase mean weekly costs of care were $AU130.30 (SD $12.64) and these fell to $AU53.32 (SD $6.47) for the prospective phase. Analysis at a population level suggests if 10,000 individuals receive 12 weeks of specialist evidence-based care, the cost savings are likely to be AU$9,238,800. Significant savings could be made by the adoption of evidence-based care such as that provided by the community and outpatient specialist wound clinics in this study.

Adverse breast cancer treatment effects: The economic case for making rehabilitative programs standard of care

Purpose: The purpose of this work was to evaluate the patient-borne financial cost of common, adverse breast cancer treatment-associated effects, comparing cost across women with or without these side-effects. Methods: 287 Australian women diagnosed with early-stage breast cancer were prospectively followed starting at six months post-surgery for 12 months, with three-monthly assessment of detailed treatment-related side effects and their direct and indirect patient costs attributable to breast cancer. Bootstrapping statistics were used to analyze cost data and adjusted logistic regression was used to evaluate the association between costs and adverse events from breast cancer. Costs were inflated and converted from 2002 Australian to 2014 US dollars. Results: More than 90% of women experienced at least one adverse effect (i.e. post-surgical issue, reaction to radiotherapy, upper-body symptoms or reduced function, lymphedema, fatigue or weight gain). On average, women paid $5,636 (95%CI: $4,694, $6,577) in total costs. Women with any one of the following symptoms (fatigue, reduced upper-body function, upper-body symptoms) or women who report ≥4 adverse treatment-related effects, have 1.5 to nearly 4 times the odds of having higher healthcare costs than women who do not report these complaints (p<0.05). Conclusions: Women face substantial economic burden due to a range of treatment-related health problems, which may persist beyond the treatment period. Improving breast cancer care by incorporating prospective surveillance of treatment-related side effects, and strategies for prevention and treatment of concerns (e.g., exercise) has real potential for reducing patient-borne costs.

Marginal costs of hospital-acquired conditions : information for priority-setting for patient safety programmes and research

Objective: To estimate the relative inpatient costs of hospital-acquired conditions. Methods: Patient level costs were estimated using computerized costing systems that log individual utilization of inpatient services and apply sophisticated cost estimates from the hospital's general ledger. Occurrence of hospital-acquired conditions was identified using an Australian ‘condition-onset' flag for diagnoses not present on admission. These were grouped to yield a comprehensive set of 144 categories of hospital-acquired conditions to summarize data coded with ICD-10. Standard linear regression techniques were used to identify the independent contribution of hospital-acquired conditions to costs, taking into account the case-mix of a sample of acute inpatients (n = 1,699,997) treated in Australian public hospitals in Victoria (2005/06) and Queensland (2006/07). Results: The most costly types of complications were post-procedure endocrine/metabolic disorders, adding AU$21,827 to the cost of an episode, followed by MRSA (AU$19,881) and enterocolitis due to Clostridium difficile (AU$19,743). Aggregate costs to the system, however, were highest for septicaemia (AU$41.4 million), complications of cardiac and vascular implants other than septicaemia (AU$28.7 million), acute lower respiratory infections, including influenza and pneumonia (AU$27.8 million) and UTI (AU$24.7 million). Hospital-acquired complications are estimated to add 17.3% to treatment costs in this sample. Conclusions: Patient safety efforts frequently focus on dramatic but rare complications with very serious patient harm. Previous studies of the costs of adverse events have provided information on ‘indicators’ of safety problems rather than the full range of hospital-acquired conditions. Adding a cost dimension to priority-setting could result in changes to the focus of patient safety programmes and research. Financial information should be combined with information on patient outcomes to allow for cost-utility evaluation of future interventions.

Intravascular device administration sets: Replacement after standard versus prolonged use in hospitalised patients--a study protocol for a randomised controlled trial (The RSVP Trial)

Introduction Vascular access devices (VADs), such as peripheral or central venous catheters, are vital across all medical and surgical specialties. To allow therapy or haemodynamic monitoring, VADs frequently require administration sets (AS) composed of infusion tubing, fluid containers, pressure-monitoring transducers and/or burettes. While VADs are replaced only when necessary, AS are routinely replaced every 3–4 days in the belief that this reduces infectious complications. Strong evidence supports AS use up to 4 days, but there is less evidence for AS use beyond 4 days. AS replacement twice weekly increases hospital costs and workload. Methods and analysis This is a pragmatic, multicentre, randomised controlled trial (RCT) of equivalence design comparing AS replacement at 4 (control) versus 7 (experimental) days. Randomisation is stratified by site and device, centrally allocated and concealed until enrolment. 6554 adult/paediatric patients with a central venous catheter, peripherally inserted central catheter or peripheral arterial catheter will be enrolled over 4 years. The primary outcome is VAD-related bloodstream infection (BSI) and secondary outcomes are VAD colonisation, AS colonisation, all-cause BSI, all-cause mortality, number of AS per patient, VAD time in situ and costs. Relative incidence rates of VAD-BSI per 100 devices and hazard rates per 1000 device days (95% CIs) will summarise the impact of 7-day relative to 4-day AS use and test equivalence. Kaplan-Meier survival curves (with log rank Mantel-Cox test) will compare VAD-BSI over time. Appropriate parametric or non-parametric techniques will be used to compare secondary end points. p Values of <0.05 will be considered significant.

A randomized controlled trial of tea tree oil (5%) body wash versus standard body wash to prevent colonization with methicillin-resistant Staphylococcus aureus (MRSA) in critically ill adults: research protocol

Background
Over the past ten years MRSA has become endemic in hospitals and is associated with increased healthcare costs. Critically ill patients are most at risk, in part because of the number of invasive therapies that they require in the intensive care unit (ICU). Washing with 5% tea tree oil (TTO) has been shown to be effective in removing MRSA on the skin. However, to date, no trials have evaluated the potential of TTO body wash to prevent MRSA colonization or infection. In addition, detecting MRSA by usual culture methods is slow. A faster method using a PCR assay has been developed in the laboratory, but requires evaluation in a large number of patients.

Methods/Design
This study protocol describes the design of a multicentre, phase II/III prospective open-label randomized controlled clinical trial to evaluate whether a concentration of 5% TTO is effective in preventing MRSA colonization in comparison with a standard body wash (Johnsons Baby Softwash) in the ICU. In addition we will evaluate the cost-effectiveness of TTO body wash and assess the effectiveness of the PCR assay in detecting MRSA in critically ill patients. On admission to intensive care, swabs from the nose and groin will be taken to screen for MRSA as per current practice. Patients will be randomly assigned to be washed with the standard body wash or TTO body wash. On discharge from the unit, swabs will be taken again to identify whether there is a difference in MRSA colonization between the two groups.

Discussion
If TTO body wash is found to be effective, widespread implementation of such a simple colonization prevention tool has the potential to impact on patient outcomes, healthcare resource use and patient confidence both nationally and internationally.

Trial Registration
[ISRCTN65190967]

Solving exchange rate puzzles with neither sticky prices nor trade costs

We present a simple framework in which both the exchange rate disconnect and forward bias puzzles are simultaneously resolved. The flexible-price two-country monetary model is extended to include a consumption externality with habit persistence. Habitpersistence is modeled using Campbell Cochrane preferences with ‘deep’ habits along the lines of the work of Ravn, Schmitt-Grohe and Uribe. By deep habits, we mean habits defined over goods rather than countries. The model is simulated using the artificial economy methodology. It offers a neo-classical explanation of the Meese–Rogoff puzzle and mimics the failure of fundamentals to explain nominal exchange rates in a linear setting. Finally, the model naturally generates the negative slope in the standard forward market regression.

The impact of nonadherence to inhaled long-acting β - adrenoceptor agonist/corticosteroid combination therapy on healthcare costs in difficult-to-control asthma

Background: Asthma is a leading, preventable cause of morbidity, mortality and cost. A disproportionate amount of the cost is generated by the 5-10%of patients with difficult-to-control asthma, who are prescribed treatment at step 4/5 of the Global Initiative for Asthma (GINA) guidelines. We have previously demonstrated a high prevalence of nonadherence to inhaled combination therapy (i.e. long-acting ß -adrenoceptor agonist [ß - agonist] and corticosteroid) in this population. The aim of this study was to examine the costs of healthcare utilization in a nonadherent group of patients with difficult-to-control asthma compared with adherent subjects. We also wished to examine potential savings if nonadherence to inhaled combination therapy could be addressed. All costs were measured from the perspective of a publicly funded health service Methods: Adherence was determined through examination of patient prescription refill behaviour and validated with a medical concordance interview. Data on healthcare use were collected from a patient survey and hospital records that included prescribed medicines, hospital admissions, intensive care unit (ICU) admissions and other unscheduled healthcare visits associated with asthma care. Activity was monetized using standard UK references and between-group comparisons based on a series of univariate and multivariate regression analyses. Results: Cost differences were identified for inhaled combination therapy, nebulizer, short acting b2-agonists and hospital costs excluding and including ICU admissions between adherent and nonadherent subjects. Compared with a group who have refractory asthma and who are adherent with medication, additional healthcare costs in nonadherent subjects are offset by the reduction in costs associated with reduced medication utilization. However, if nonadherence can be successfully targeted and hospital admissions avoided in this population, there is a potential $475 ($843-$368) saving per patient, per annum. Conclusion: Nonadherence is an important cause of difficult-to-control asthma. A uniform cost for subjects with difficult-to-control disease can be applied to economic analyses, independent of adherence, as increased healthcare utilization costs are offset by the reduced medication cost due to poor adherence. However, there are substantial potential savings in subjects with difficult-to-control asthma, who are nonadherent to inhaled combination therapy, if cost effective strategies for nonadherence are developed. © 2011 Adis Data Information BV. All rights reserved.

Hidden costs of control: four repetitions and an extension

We report four repetitions of Falk and Kosfeld's (Am. Econ. Rev. 96(5):1611-1630, 2006) low and medium control treatments with 476 subjects. Each repetition employs a sample drawn from a standard subject pool of students and demographics vary across samples. We largely confirm the existence of hidden costs of control but, contrary to the original study, hidden costs of control are usually not substantial enough to significantly undermine the effectiveness of economic incentives. Our subjects were asked, at the end of the experimental session, to complete a questionnaire in which they had to state their work motivation in hypothetical scenarios. Our questionnaires are identical to the ones administered in Falk and Kosfeld's (Am. Econ. Rev. 96(5):1611-1630, 2006) questionnaire study. In contrast to the game play data, our questionnaire data are similar to those of the original questionnaire study. In an attempt to solve this puzzle, we report an extension with 228 subjects where performance-contingent earnings are absent i.e. both principals and agents are paid according to a flat participation fee. We observe that hidden costs significantly outweigh benefits of control under hypothetical incentives.