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The Social Responsibility Of Business - 787 Words

The economist and Nobel laureate Milton Friedman’s article published in The New York Times Magazine in 1970 titled, â€Å"The Social Responsibility of Business Is to Increase Its Profits.† (NYTimes, 1970) set tone for companies all across the country and all over the world. Companies start to turn in profits that shattered all charts and stock markets. Beginning in 1960s to 1990s, Capitalism had won the cold war with its arch rival the Soviet Union had withered away into the oblivion and the companies that turned focused in profits could not have been more right, or so everybody thought. With the latest economic recession in 2008, everything came tumbling down on the front door of once Wall Street and brought the world economy to halt. Today the social responsibility of Business is defined by economic development, the environment investment and human rights. Today, the general publics which turns to social media in every step to learn about company’s social involvement and use social media as a tool to address or engage with the company. In this interconnected world, a company cannot afford to ignore their social responsibilities. It had proved time and again, any missteps a company makes in the social media can prove to be a publicity nightmare from which it can barely come out unharmed. Just 10 years ago, only a handful of the fortune 500 companies paid any attention to Corporate Social Responsibility (CSR). However, now â€Å"More than 8,000 businesses around the worldShow MoreRelatedThe Social Responsibility Of Business932 Words   |  4 PagesA corporation does do business within a vacuum; rather exist as part of larger collective framework of society, stakeholders and a global business community. I believe that corporations which are profitable, and promote moral and ethical standards are the benchmark of success; addi tionally, corporations bear a great social responsibility to the society it exists within, an simply working within â€Å"the basic rules of society, both those embodied in law and those embodied in ethical custom† is not enoughRead MoreBusiness and Social Responsibility1140 Words   |  5 PagesWhen a business gets incorporated regardless of the business size and the nature of profession requires an adequate execution methods for being successful and to achieve its goals. Some of these goals can be short-term or long-term, depends on the nature of business. Likewise, these execution methodologies can be vary time to time as the corporate needs to satisfy different groups of people such as : top hierarchy stakeholders, staffs ,shareholders, and even non-related business groups such as environmentalistsRead MoreThe Social Responsibility Of Business1422 Words   |  6 Pagesthe business be held accountable for these actions? In his essay â€Å"The Social Responsibility of Bu siness Is to Increase Its Profit† Milton Friedman, powerful economist, discusses what a business should prioritize in the economic system. Friedman declares what a business is responsible for and the guidelines they must follow. Due to Friedman’s view, he would not have condoned the actions and decisions that the executives at Ford Motor Company took. Friedman argues that the only responsibility a businessRead MoreThe Social Responsibility Of Business1042 Words   |  5 PagesCorporate Social Responsibility is defined as a business preparation that involves participating in creativities that help society. Friedman: The Social Responsibility of Business is to increase its profits. Milton Friedman argues that the only social responsibility a business has is to itself – mainly to its profits, and therefore, its stakeholders. The business management in charge of a company works for the organization and eventually for the stakeholders. This person is responsible for carryingRead MoreThe Social Responsibility of a Business647 Words   |  3 Pagesï » ¿The Social Responsibility of Business: The role of business in the society became a major aspect across business after Milton Freedman wrote the most provocative article in 1970. As an economist, Freedman stated that the main purpose of businesses is to generate profits for its shareholders. Furthermore, he argued that companies with responsible attitudes were likely to encounter increased binding constraints unlike those that lacked these attitudes, resulting in them becoming less competitiveRead MoreThe Social Responsibility Of Business1437 Words   |  6 Pagesthe business be held accountable for these actions? In his essay â€Å"The Social Responsibility of Business Is to Increase Its Profit† Milton Friedman, powerful economist, discusses what a business should prioritize in the economic system. Friedman declares what a business is responsible for and the guidelines they must follow. Due to Friedman’s view, he would not have condoned the actions and decisions that the executives at Ford Motor Company to ok. Friedman argues that the only responsibility a businessRead MoreThe Social Responsibility Of Business2053 Words   |  9 Pagesevolution-taking place; now the level of a business social responsibility has become increasingly integrated into modern business practices. This focus has seen both advantages and disadvantages to the business. However, to what extent has the use of the greater focus of a business social responsibility affected its competitive advantage in its marketplace. CSR is described as; â€Å"the principle that companies can and should make a positive contribution to society, of managing the social, environmental and economicRead MoreSocial Responsibility Of A Business1444 Words   |  6 Pagesareas of business and nonprofit management. However, Cohen’s article on social responsibility drew a lot attention from other scholars like Friedman. In view of this, this paper will discuss and define the concept of social responsibility of a business to its workers, stakeholders, and society; how the perspectives align with that of Drucker; comparing Cohen’s opinion with that of Friedman and finally determines which of the two individual’s opinion best aligns with the current business climate promotingRead MoreThe Social Responsibility Of Business Essay1959 Words   |  8 Pagesagree or disagree with the following quotation: â€Å"There is one and only one social responsibility of business—to use its resources and engage i n activities designed to increase its profits so long as it stays within the rules of the game, which is to say engages in free and open competition, without deception and fraud.† Milton Friedman, a Nobel Prize winning economist. In other words, the social responsibility of business is to make a profit. I do not agree with the following quote by Milton FriedmanRead MoreThe Social Responsibility Of Business1463 Words   |  6 PagesIn his paper titled The Social Responsibility of Business is to Increase Its Profits†, Milton Friedman addresses the key issue of weighing social responsibility against profit maximization for shareholders. This conflict is the basis for Friedman’s whole paper, as he explores the two sides of the situation. In order to set up his argument, Friedman lays down a framework by explicitly stating a certain premise. This is that businessman view â€Å"social responsibility† and profit as not being mutually

Child Labour And Child Labor - 1600 Words

Child Labor Issues There are children that suffer through child labor daily. Child labor is the use of children in a business or industry, usually illegal. â€Å"3 billion people around the world survive on $2.50 a day or less. And 2 billion people do not hold a bank account or have access to essential financial services† (â€Å"Living in Poverty†1). Children that are normally in labor come from a poor family that’s in need of money so badly that it comes down to selling their own children or putting them up for jobs. Child labor is happening right now, all around our world. There are children being forced into labor and not knowing anything different. Therefore, some parents and families may rely on child labor in order to have lives basic†¦show more content†¦Ã¢â‚¬Å"Willful violations may be prosecuted criminally and the violator fined up to $10,000† (â€Å"Department of Labor† 1). Child labor is mostly made up of children who have familie s in poverty. Poverty is when someone is in the state of being extremely poor. There are many reasons for why so many people have ended up in poverty. The causes of child labor could decrease in the future. There are many charities for people in poverty. Not having people in poverty leads to Adults not putting their children through labor. Child labor isn’t good for our world. Not only because it’s against the law, but it effects our future. It effects our future by the children getting put into labor who can’t become knowledgeable people. Who could possibly do great things when they become adults because they are being taken out of school to work for their families. Child labor is a very effective thing to many people. It effects the parents of the children because many of them end up never even seeing their children because they are always having to work for them. Also it effects economies of where child labor is mainly happening. For example, child labor is m ostly found in Asia. Which means people might start looking at Asia as if it were a place where you can get away with child labor easier than other places. Which is not good for the economy of Asia. Supply needs and industry demands for cheap, poor adults can causeShow MoreRelatedChild Labour And Child Labor1142 Words   |  5 Pagescurrently and previously forced to endure child labour. Child labour affects children mentally and physically, as well as putting children at risk for abuse from employers. Child labour is an everyday task for as many as 280 million children. They work on farms, factories, and in sweatshops for extremely low fees; most have little or no education. Child labour addresses many issues and thoughts such as, dehumanization, the lack of enforcement of child labour laws which exist in most countries in theRead MoreChild Labour And Child Labor1381 Words   |  6 PagesThroughout the world around 218 million children are exposed to child labour. It occurs in mo st countries such as underdeveloped places such as India, Ethiopia, Tanzania, Mexico, Pakistan and many others. Many of these children do not go to school because their families cannot provide an income that would cover the fees for an education. More than half of them are exposed to the worst forms of child labour such as working in hazardous environments, slaver and Illicit activities including drug traffickingRead MoreThe Theory Of Child Labour1398 Words   |  6 PagesThe tem â€Å"Child Labour† is often defined as work that deprives children from their childhood, their potential and their dignity and that is harmful to physical and mental development. It is serious and extensive problem with many children under the age of 14 years. Children living in poorest household and in rural areas are mostly likely to be engaged in child labour. Children have worked for as long as families have needed all hands to pitch in. Beyond defining work as a means of survival, definingRead MoreNegative Effects Of Child Labor In Ghana1583 Words   |  7 PagesLives of little ones are destroyed, when child labor is employed. This is one of the famous slogans that shows the severity and the cruelty of child labor. Child labor refers to work that threatens children’s health and safety or deprives their right to education (Herring). Child labor is a serious global issue that the world is facing these days. According to the International Labor Organization (ILO), 215 million children worldwide between the ages of five and seventeen work under conditions thatRead MoreChild Labour And How Does It Happen?914 Words   |  4 PagesChild Labour The focus of this investigation is Child labour and recently developing child labour especially in developing countries. Child labour is when someone has power over children and they use it to their advantage such as businesses, especially when illegal or considered exploitative. It is predicted that child labour happens where there is more people. There are a lot of different types of child labour such as: Agriculture, Carpet weaving, automobile workshop, mining, stone/ marble cuttingRead MoreChild Labour : A History Essay1228 Words   |  5 PagesChild Labour in The United States Child Labour: A History America and The Industrial Revolution ‘Forms of child labor, including indentured servitude and child slavery, have existed throughout American history.’ (http://www.continuetolearn.uiowa.edu/laborctr/child_labor/about/us_history.html) During the years following the Civil War, (http://americanhistory.about.com/od/industrialrev/a/indrevoverview.htm) the American working class made an abrupt transition away from farm work and home choresRead MoreChild Labour. . The Industrial Revolution (1760 To 1840)1134 Words   |  5 PagesCHILD LABOUR The industrial revolution (1760 to 1840) was an exciting time, and while Britain and America were transforming modern society there was an incredibly high demand for labor. Children as young as 4 years old were working underpaid in factories to keep themselves and their poverty struck families alive. I will be exploring why it was that so many children were working in factories during the industrial revolution, and how they compare to the child labourers of todayRead MoreFree the Children from Child Labour1517 Words   |  7 PagesFree The Children from Child Labour: The Disadvantageous of Child Labour Two hundred million children are suffering in the world! â€Å"the world has an estimated 186 million child labourers – 5,7 million in forced and bonded labor, 1.8 million in prostitution, and 0.3 million in armed conflict† .( Basu amp; Tzannatos, 2003, p.147). In Africa, Asia and the Middle East, a huge number of children are child labourers, and most of them under 14 years old. However, they are working hard as sameRead MoreChild Labor Is Not An Effective Way For India1533 Words   |  7 Pagesreceive our goods. All around the world, child labor is one of the most widely social issues affecting the younger population, specifically, in India. For the children of India, work becomes a nightmare based on suffering and mistreatment. While children have no choice but to be independent and forced to work, it can be a big influence on the child’s education, life, health, and development. Where child labor is deeply rooted from tradition, the causes of chi ld labor are difficult and complex beliefs andRead MoreInternational Labor Standards Of Child Work906 Words   |  4 PagesINTERNATIONAL PERSPECTIVE International labour standards characterize child work by its outcomes; it includes work that is rationally, physically, socially or ethically perilous and destructive to children, and meddles with their educating. UNICEF characterizes child work as work that surpasses a base number of hours, contingent upon the age of a child and on the sort of work. The 18th International Conference of Labor Statisticians held at Geneva held that Child work (slated for nullification) ought

Dantes Inferno Essay - 856 Words

Dantes Inferno It was sometime in the middle of the 17th century that British cleric Thomas Fuller wrote, He that falls into sin is a man; that grieves at it, is a saint; that boasteth of it, is a devil. If Fuller was right, where does one place Dante, the pilgrim who bravely wandered where no man had wandered before? Certainly, the sojourner precisely written by the poet of the same name was a man. Certainly, also, he repented his sinful ways (how could one not after braving not only the depths of Hell but later the stretches of Purgatory and the many waters of Heaven?), but he was no saint. Indeed, Inferno itself can be easily construed as a boast of sorts—made it through hell, met Lucifer, bought the t-shirt. But in reality,†¦show more content†¦In Canto 3, Dante is so overwhelmed by his surroundings that overcame all feeling in me [ln 135] and he faints, saying dramatically, I fell like one whom sleep is taking [ln 136]. Not much later, in Canto 5, the traveling duo comes upon a pair of lovers, condemned to an eternity of suffering due to a small case of incontinence. Dante is overcome with sympathy as he listens to their story, and promptly blacks out again, this time with even more dramatic flair: for pity I fainted as if I were dying, and I fell as a dead body falls [ln 141-142]. Before he hits the dust, he manages to express his sympathy to Francesca, one of the lovers: Francesca, your sufferings make me sad and piteous to tears [ln 116-117]. This sense of pity is an important indicator of his progress, or lack thereof, through Hell. At this, the beginning of his journey, Dante identifies with the condemned and thus has not only sympathy, but empathy toward them. He understands a life of sin and can picture himself in their place. As time goes by and the pilgrims journey continues, Dante gets hardened against the strife and pain inflicted upon the sinners. Of course, seeing enough of anything begets tolerance, but in Dantes case his lessening sympathy shows lessening empathy as well. His thoughts and ideals have become progressively more pure and pious, and hes started to lose his identification with the life of sin and contempt. Virgil encourages his displacementShow MoreRelatedThe Story in Dantes Inferno910 Words   |  4 PagesIn the story Dante’s Inferno we as readers get to experience hell in a whole light. Throughout the narrative we find out that hell is not only what we know of it from the Christian bible . According to Dante Hell is a complex situation that is nothing like anything we have read earlier. There are many people who have read at least some portion of the Holy Bible. Whether it be because of personal reasons or educational ones, the holy bible most read (and sold) books in existence. Through readingRead MoreDantes Inferno Essay1447 Words   |  6 PagesAt the start of the poem we find Dante in the dark forest(Inf. 1.2). Not much description is given maybe to show Dante’s disorientation. Whether the disorientation is spiritual, physical, moral or political; that is unclear at the start of the poem. The poem us written this way so reader can identify with Dante. It is also written in such a way that sometimes it is difficult to understand some parts, you sometimes have to read it backwards to get a better understanding. The way Dante characterizesRead MoreThe Odyssey and Dantes Inferno1300 Words   |  5 Pagesheart of a poet, whether it be romance, adventure or simply a story from experiences. And perhaps there are no better poets that are better able to drag their willing audience along a journey than Homer and Dante. The epic tales of The Odyssey and Inferno, respectively, were seemingly written along a parallel train of thought when describing their characters journey, easily engaging the creative functions of the reader with adventurous tales of hope and adventure. Their characters, Odysseus and DanteRead More Dantes Inferno Essay496 Words   |  2 PagesDantes Inferno In Canto I, Dante has strayed from the True Way into the Dark Wood of Error. He opens his eyes and sees the mount Mount of Joy which is lit up by the sun. He sets out to try to climb the mountain, but his way is blocked by the Three Beasts of Worldliness: The Leopard of Malice and Fraud, The Lion of Violence and Ambition, and The She-Wolf of Incontinence. He then starts to lose all hope when Virgil, Dante’s symbol of Human Reason appears. Dante is very frightened and nervous byRead MoreCritique Of Dantes Inferno1602 Words   |  7 Pages The Inferno is the first part of Dante’s epic poem The Divine Comedy. The Inferno tells the journey of Dante going through Hell, guided by the ancient Roman poet Virgil. In the poem Hell is illustrated as nine circles of torture that is located in the middle of the Earth, the Inferno describes the recognition and the ultimate rejection of sin. Every canto is written in parts of what sinner is being punished, what their punishment is an d why they are there. Susan Blow writes a critique of Dante’sRead MoreThe Influence of Dantes Inferno Essay1380 Words   |  6 Pages Dante Alighieri’s Divine Comedy is an epic poem that begins with the Inferno. The Inferno is an extremely influential part of European literature. The structure of story is for many people a piece of the vision of Hell. Religiously, this poem has had great prevalence. Dante paints a picture of the Hell that is both unsettling and justifiable. A whole world is created through his poem. The levels and intensity of sin is pondered. Crime is put to a level of small to large scale. ThoseRead MoreAnalysis of Dantes Inferno Essay748 Words   |  3 PagesIn Dante’s Inferno, Dante is taken on a journey through hell. On this journey, Dane sees the many different forms of sins, and each with its own unique contrapasso, or counter-suffering. Each of these punishments reflects the sin of a person, usually offering some ironic way of suffering as a sort of revenge for breaking God’s law. As Dante wrote this work and developed the contrapassos, he allows himself to play God, deciding who is in hell and why they are there. He uses this opportunity to strikeRead MoreThe Contributions Of Death In Dantes Inferno1168 Words   |  5 PagesIn the Inferno, Dante journeys along the path that will eventually lead him to God by first passing through Hell. As he goes through his journey in Hell with Virgil, Dante encounters several sinners who are being punished based upon the sins each individual committed. Dante’s attitude towards the sinners’ punishment changes from sympathy to hostility as he goes through his path towards God. At first, Dante is to feeling sympathy for the souls that reside in the Second Circle of Hell, whose punishmentRead MoreDantes Inferno and the Renaissance Essay2380 Words   |  10 PagesIt is one of the most known and referenced books of its time and is still a commonly read work of literature, but is Dante Alighieri’s The Inferno more that just one man’s interpretation of what hell is like? We know it now as a remarkable piece of literature, but some contend that it was a turning point in writing and how many viewed the world. Claims have also been made that it is an example of how man paved the road out of the Dark Ages and into the Renaissance, the period that shaped a lot ofRead MoreDantes Inferno and The Afterlife Essay1819 Words   |  8 Pagesperson can interpreted it in a slightly different way and allegories are most often personalized by a reader. Dante’s Inferno allegory is present throughout the entire poem. From the dark wood to the depths of Dan te’s hell he presents the different crimes committed in life as they could be punished in death. One of the first punishments we observe comes from the fifth circle of Dante’s hell, the wrathful and the sullen, as the author expresses his thoughts of the fitting consequence with each sin

Fv Project Summary of Fasb and Iasb Free Essays

Project Summary Background The objective of this project is to provide guidance to entities on how they should measure the fair value of assets and liabilities when required by other Standards. This project will not change when fair value measurement is required by IFRSs. Discussion at the September 2005 IASB Meeting At the September 2005 meeting, the IASB added the Fair Value Measurements topic to its agenda. We will write a custom essay sample on Fv Project Summary of Fasb and Iasb or any similar topic only for you Order Now The aim of the project is to provide guidance to entities on how they should measure the fair value of assets and liabilities when required by other Standards. This project will not change when fair value measurement is required by IFRSs. Discussion at the November 2005 IASB Meeting The staff conducted an education session on the FASB’s working draft of a final Statement on Fair Value Measurements. In addition, the staff reviewed the scope of FASB’s Fair Value Measurements project as it relates to IFRSs and the issues and questions to be addressed in preparing an IASB Exposure Draft and related Invitation to Comment. No decisions were made. At a previous meeting, the Board decided to issue the FASB’s final Statement on Fair Value Measurements as an IASB Exposure Draft with an Invitation to Comment. The appendices in the FASB document dealing with consequential amendments and references to US GAAP pronouncements will be replaced with proposed consequential amendments and references to IFRSs. The Board further decided that there should be limited changes to the FASB’s document. Instead, the Invitation to Comment should discuss any areas where the Board disagrees with the FASB’s conclusions along with the basis for the disagreement. The staff expects these areas to be identified during Board deliberations during the December 2005 and January 2006 meetings whilst aiming toward issuance of the IASB Exposure Draft by April 2006. Discussion at the December 2005 IASB Meeting Definition of fair value The staff presented a paper identifying and comparing the differences between the definitions of fair value in the FASB’s draft Fair Value Measurements (FVM) standard to the definition in IFRS. This comparison was meant to assist the Board in concluding whether or not to replace the current IFRS definition of fair value with the FVM standard definition. The staff’s overall recommendation was to replace the current IFRS definition of fair value with the definition of fair value in the FVM standard. However, the staff made it clear that it was not stating that this definition be applied to all instances where fair value is currently used in IFRS. This scoping issue is the subject for a separate discussion that would span several Board meetings. The Board discussed in detail, the various components of the current and proposed definition of fair value in the context of the staff’s analysis. Although the Board was in overall agreement to proceed with the proposed definition in the FVM standard, the following points were noted: †¢ Certain Board members wanted to see the various issues discussed pulled together and presented in some logical manner that would clarify how fair value is approached. As noted below, the Board was concerned that the proposed definition would cause confusion where this was not the intention. Some Board members were concerned about changing ‘amount’ to ‘price’ as this would change the meaning of fair value. This concern seemed to emanate around the treatment of transaction costs. †¢ The explicit discussion of ‘exit values’ in the draft guidance was seen by some as problematic. Illustrations were provided indicating that at the time of the transacti on; the agreed price constitutes both an ‘entry’ and ‘exit’ value for that specific asset or liability. Others indicated that it was their belief that the current fair value definition already encompasses an exit value notion. Following on from this issue, the notion of ‘marketplace participants’ is believed by some Board members to be a less superior phrase to the widely accepted ‘knowledgeable, willing parties’ notion which is more readily understood to apply to a transaction between two parties without the necessity of the existence of a ‘market’. The FASB’s rationale for introducing the ‘marketplace participants’ notion as a means of excluding to the greatest extent possible, any entity specific factors when determining fair value, was noted. The Board will be asked to debate the meaning of the ‘reference market’ notion at subsequent meetings. Scope of the Fair Value Measurements Project The Board considered a paper setting out on a Standard by Standard basis, which individual standards should be scoped in or out of this project. That paper was organised into three sections: †¢ Standards that require fair value measurement †¢ Standards that require fair value measurement by reference to another standard †¢ Standards that do not require fair value measurement Within each of these sections, the staff made various proposals for the Board’s consideration. Overall, the staff recommended not modifying as part of this project existing reliability clauses and practicability exceptions. The staff concluded that such modifications could result in significant changes to current practice and that any changes should be considered on a standard-by-standard basis separately from this project. Standards that require fair value measurement The following standards were noted as requiring assets or liabilities to be measured at fair value in certain circumstances: †¢ (a) IAS 11 – Construction Contracts †¢ (b) IAS 16 – Property, Plant and Equipment (c) IAS 17 – Leases †¢ (d) IAS 18 – Revenue †¢ (e) IAS 19 – Employee Benefits †¢ (f) IAS 20 – Accounting for Government Grants and Disclosure of Government Assistance †¢ (g) IAS 26 – Accounting and Reporting by Retirement Benefit Plans †¢ (h) IAS 33 – Earnings per Share †¢ (i) IAS 36 – Impairment of Asset s †¢ (j) IAS 38 – Intangible Assets †¢ (k) IAS 39 – Financial Instruments: Recognition and Measurement †¢ (l) IAS 40 – Investment Property †¢ (m) IAS 41 – Agriculture †¢ (n) IFRS 1 – First-time Adoption of International Financial Reporting Standards †¢ (o) IFRS 2 – Share-based Payment (p) IFRS 3 – Business Combinations and the June 2005 Exposure Draft †¢ (q) IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations The Board agreed with the staff recommendations (as set out in the observer notes) for each standard except in the following instances: †¢ IAS 18 – the staff concluded that in the instances where an entity received services for dissimilar goods or services, the measurement objective is not consistent with the draft FVM standard and therefore IAS 18 should be excluded from the scope. The Board noted this issue but indicated a preference to include IAS 18 within the scope of the FVM Standard as this is a minor part of the fair value requirements in IAS 18. The confusion caused in the market if the Board were to exclude IAS 18 from the project would be undesirable. †¢ IFRS 2 – due to the grant date model, the Board noted the issue that may arise where an entity measures a share-based payment transaction by reference to the equity instruments granted, not the goods or services received. However, the Board decided to include IFRS 2 within the scope of the FVM Standard on the same basis as for IAS 18. Standards that require fair value measurement by reference to another standard †¢ (a) IAS 2 – Inventory †¢ (b) IAS 21 – The Effects of Changes in Foreign Exchange Rates †¢ (c) IAS 27 – Consolidated and Separate Financial Statements †¢ (d) IAS 28 – Investment in Associates †¢ (e) IAS 31 – Interests in Joint Ventures (f) IAS 32 – Financial Instruments: Presentation and Disclosure †¢ (g) IFRS 4 – Insurance Contracts †¢ (h) IFRS 7 – Financial Instruments The Board agreed with the staff recommendation that discussion of the above is not necessary as these standards do not contain any additional requirements to measure assets or liabilities at fair value. Standards that do not require fair value measurement †¢ (a) IAS 1 – Presentation of Financial Statements †¢ (b) IAS 7 – Cash Flow Statements (c) IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors †¢ (d) IAS 10 – Events After the Balance Sheet Date †¢ (e) IAS 12 – Income Taxes †¢ (f) IAS 14 – Segment Reporting †¢ (g) IAS 23 – Borrowing Costs †¢ (h) IAS 24 – Related Party Disclosures †¢ (i) IAS 29 – Financial Reporting in Hyperinflationary Economies †¢ (j) IAS 30 – Disclosures in the Financial Statements of Banks and Similar Financial Institutions †¢ (k) IAS 34 – Interim Financial Reporting (l) IAS 37 – Provisions, Contingent Liabilities and Contingent Assets †¢ (m) IFRS 6 – Exploration for and Evaluations of Mineral Reserves With regard to IAS 37, the Board concurred with the staff that the measurement principles therein are consistent with fair value principles in many respects and went further to state that when the amendments to IAS 37 are finalise d, it would add explicit reference to fair value to clarify this issue. Discussion at the February 2006 IASB Meeting This was a brief session to inform the Board about recent tentative decisions of the FASB on its fair value measurement standard. No observer notes were provided for this session. The FASB discussed the fair value hierarchy at its last meeting. FASB’s exposure draft had proposed a five-level fair value hierarchy. The FASB has come to the conclusion that it is difficult to distinguish levels two to four in the hierarchy. They have therefore reduced the hierarchy to three levels. The FASB has not made other changes to its proposed fair value guidance. The staff said that discussion will continue in March. Discussion at the May 2006 IASB Meeting Principles of the fair value measurement project The following principles were put to the Board as those forming the foundation of the fair value measurement project: †¢ The objective of a fair value measurement is to determine the price that would be received for an asset or paid to transfer a liability in a transaction between market participants at the measurement date. †¢ The definition of fair value and its measurement objective should be consistent for all fair value measurements required by IFRS. A fair value measurement should reflect market views of the attributes of the asset or liability being measured and should not include views of the reporting entity that differ from market expectations. †¢ A fair value measurement should consider the utility of the asset or liability being measured. As such, the fair value measurement should consider the location and the condi tion of the asset or liability at its measurement date. The Board concurred with the staff that the above principles form the foundation of the fair value measurement project. Revised definition of fair value In the staff’s view, the FASB’s revised definition of fair value is substantively similar to the one tentatively approved by the IASB in December 2005. Based on that, the IASB agreed that the revised definition is consistent with the measurement objective. However, some Board members expressed concern about the change to a ‘price’ rather than ‘amount’. In addition, the revised definition is based on an exit price notion that does not consider prices that exist other than the exit price. As a consequence, other Board members noted that the current definition will require measurement based on a hypothetical market that, for some types of assets and liabilities, cannot be calibrated with reality and in most cases will result in day 1 gains or losses, which constituents are uncomfortable with. Revised fair value hierarchy The draft fair value measurement statement indicates that valuation techniques used to measure fair value shall maximise the use of observable inputs and minimize the use of unobservable inputs. The hierarchy prioritises the inputs to valuation techniques used to measure fair value based on their observable or unobservable nature. The revised three-level hierarchy is summarised as follows: †¢ Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets the reporting entity has the ability to access at the measurement date. †¢ Level 2 inputs are observable inputs other than quoted prices for identical assets or liabilities in active markets at the measurement date. Level 3 inputs are unobservable inputs, for example, inputs derived through extrapolation or interpolation that cannot be corroborated by observable data. However, the fair value measurement objective remains the same. Therefore, unobservable inputs should be adjusted for entity information that is inconsistent with market expectations. Unobservable inputs should also consider the risk premium a market participant (buyer) would demand to assume the inherent uncertainty in the unobservable input. IFRSs currently does not have a single hierarchy that applies to all fair value measures. Instead individual standards indicate preferences for certain inputs and measures of fair value over others, but this guidance is not consistent among all IFRSs. The Board agreed with the staff’s conclusion that the revised hierarchy in the draft fair value measurement statement is consistent with the principles discussed above and that the hierarchy in the draft fair value measurement statement represents an improvement over the disparate and inconsistent guidance currently in IFRSs. Unit of account and fair value measurements The Board agreed that it is not appropriate or practical to provide detailed guidance on the unit of account within the fair value measurement project. Determining the appropriate unit of account is a critical element of accounting and is not always consistent from one asset or liability to another or from one type of transaction to another. Determination of which market The Board agreed with the FASB’s conclusion to adopt the ‘principal market’ view. While this will result in a change from the ‘most advantageous’ view currently in IFRS, the ‘principal market’ view more accurately reflects the fair value measurement objective and provides a more representative measure of fair value by giving preference to highly liquid markets over less liquid markets. Transaction price presumption At the December 2005 meeting, the IASB tentatively agreed the fair value measurement objective was an exit price. The December discussion highlighted the conceptual difference between transaction price (what an entity would pay to buy an asset or receive to assume a liability) and an exit price objective (what an entity would receive to sell an asset or pay to transfer a liability). The staff concluded that an entity cannot presume an entry price to be equal to an exit price without considering factors specific to the transaction and the asset or liability. As a consequence, the staff plans to bring a separate discussion of day 1 gains or losses to the Board at a future meeting. The Board shared the concerns of the staff that if a transaction price were presumed to be fair value on initial measurement, entities might not sufficiently consider the differences between an entry transaction price and an exit fair value. As such, IFRSs should require an entity to consider factors specific to the transaction and the asset or liability in assessing if the transaction price represents fair value. Fair value within the bid-ask spread Entities often transact somewhere between the bid and ask pricing points, particularly if the entity is a market maker or an influential investor. However, application of the rule in IAS 39 results in consistency across entities without consideration of entity specific factors that may influence where within the bid-ask spread the entity is likely to transact. Further, the rule creates a bright-line in quoted markets, thus limiting the use of judgement and subjectivity in the fair value measurement. The Board agreed to add a discussion to the invitation to comment that communicates agreement with the principle in the draft fair value measurement statement. The discussion would state that it is not appropriate to use a consistently applied pricing convention as a practical expedient to fair value. This recommendation would result in both a change to existing IFRSs as well as a departure from the FASB’s draft fair value measurement statement. Transaction and transportation costs in measuring fair value The definitions of transaction type costs vary in IFRSs, though such costs are consistently excluded from fair value measurements. Currently, IFRSs are not clear (with the exception of IAS 41) whether transportation costs are an attribute of the asset or liability, and as such should be included in the fair value measurement. The draft fair value measurement statement defines transaction costs as the incremental direct costs to transact in the principal or most advantageous market. Incremental direct costs are costs that result directly from, and are essential to, a transaction involving an asset (or liability). Incremental direct costs are costs that would not be incurred by the entity if the decision to sell or dispose of the asset (or transfer the liability) was not made. In the draft fair value measurement statement, the FASB concluded the fair value measurement of the asset or liability shall include only those costs that are an attribute of the asset or liability. The FASB concluded transaction costs are an attribute of the transaction, not an attribute of the asset or liability. Therefore the fair value measurement of the asset or liability shall not include transaction costs. The staff agreed with the conclusions in the draft FVM statement regarding transportation and transaction costs. However, the staff concluded that the discussion of what types of costs are attributes of the asset or liability could be more robust as it is difficult to decipher justification for different treatment of transaction costs and transportation costs in the current discussion in the draft FVM statement. As such, the staff recommended, and the Board agreed that the invitation to comment should include a question on the sufficiency of the discussion of costs that are attributes of an asset or liability, such as transportation costs. Discussion at the June 2006 IASB Meeting The Board continued its discussion of Fair Value Measurements (FVM), and reviewed the current project plan and due process steps. In addition, the Board had a preliminary discussion on accounting for ‘day-one gains’. Project Plan and Due Process The Board was briefly updated on the developments from the last FASB meeting at which the Fair Value Measurements project was discussed. The Fair Value Measurement project was added to the IASB’s agenda in September 2005. At that time, the Board decided that they would expose the FASB’s final FVM standard as an IASB exposure draft, not modifying it other than change US GAAP references to the appropriate IFRS references. Since then, the staff has become aware of concerns raised by IASB constituents. These include: †¢ As the FVM project could change how fair value is measured, some think that proceeding directly to an IASB exposure draft based on the final FASB document could potentially short-cut the IASB’s due process requirements. †¢ As the FASB document applies a different concept of fair value from that of older IFRSs, constituents have problems with the conceptual reasons for changing to an ‘exit price objective’ of fair value, particularly when an entity have no intention to sell an asset. As fair value is being increasingly used, fundamental questions regarding relevance and reliability need to be debated prior to completion of the project. Due to these concerns, the staff presented the Board with two alternative solutions: †¢ The first alternative was a modified plan which still would include issuing the FASB document as an exposure draft, in addition to conducting field visits and round-table discussions to get input from constituents. †¢ The second alternative was to issue the FASB document as a discussion paper, deliberate this, and then issue an exposure draft. This would allow the Board more time and more flexibility to address the concerns raised by constituents and hopefully a better standard, even if this route will be a longer one. The Board expressed sympathy for the concerns raised by the constituents, and the majority of Board members agreed that this would require a shift from the current project plan to alternative two which is to issue the FASB document as a discussion paper. However some Board members thought that the second alternative should be avoided as this would delay the issuing of a final standard too long. Alternative two will result in a final IFRS in late 2008 or early 2009. Some Board members thought that it would be crucial to communicate with constituents that this move away from the current project plan and towards the discussion paper route would take more time, but that it would be done to ensure the interest of constituents. The Board voted in favour of alternative two, resulting in a discussion paper being issued based on the FASB document. The Board noted that a final plan could not be put together before the final FASB document is issued. As long as the FASB have not issued their final document including, e. . their application guidance, the IASB will not have a public document accessible for issuing as the IASB’s discussion paper. Day-one Gains and Losses Fair value, as defined in the FASB’s document is an exit price. As a result of the Board’s tentative approval of the exit price definition of fair value, in circumstances where an asset or a liability is required to be measured at fair value on initial recognition, a day-one gain or loss may be recorded. The staff believes the existing guidance in IAS 39 is inconsistent with the exit price notion as tentatively approved by the Board, and therefore needs amendment. The Board was asked whether they would consider: †¢ To make only consequential amendments to conform IAS 39 with the guidance in the Fair Value Measurement statement and to leave the current guidance on recognition of day-one gains and losses in IAS 39. †¢ Making consequential amendments and change the existing guidance in IAS 39. The Board decided that they would not make any amendments right now, but rather put a question in the discussion paper whether this should be dealt with in a separate project or as a part of the Fair Value Measurement project. September 2006: FASB issues fair value measurement standard On 15 September 2006, the US Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 Fair Value Measurements. FAS 157 provides enhanced guidance for using fair value to measure assets and liabilities. It applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. FAS 157 does not expand the use of fair value in any new circumstances. Click for: †¢ FASB News Release (PDF 19k) Special issue of the Heads Up Newsletter Summarising FAS 157 (PDF 218k) Some points about FAS 157: †¢ Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. †¢ Fair value should be based on the assumptions market participants would use when pricing the asset or liability. †¢ FAS 157 establishes a fair va lue hierarchy that prioritises the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, for example, the reporting entity’s own data. †¢ Fair value measurements would be separately disclosed by level within the fair value hierarchy. †¢ FAS 157 is effective for financial statements issued for fiscal years beginning after 15 November 2007, and interim periods within those fiscal years. Early adoption is permitted. †¢ FAS 157 may be downloaded from FASB’s Website without charge. The IASB has on its agenda a project on fair value measurement. It is one of the convergence projects with the FASB. This means that the IASB and the FASB plan to have similar, if not identical, definitions and guidance relating to fair value measurements. The IASB plans to issue a discussion paper in the fourth quarter of 2006 that will: †¢ indicate the IASB’s preliminary views on the provisions of FAS 157; †¢ identify differences between FAS 157 and fair value measurement guidance in existing IFRSs; and †¢ invite comments on the provisions of FAS 157 and on the IASB’s preliminary views about those provisions. Discussion at the September 2006 IASB Meeting The staff noted that FAS 157 Fair Value Measurements was issued on 15 September 2006 (see IAS Plus News Story of 19 September 2006). The IASB staff can now complete the preparation of an IASB Discussion Paper on Fair Value Measurements, which will comprise: †¢ FAS 157; †¢ excerpts of existing FVM guidance in IFRSs; and †¢ an Invitation to Comment that expresses the Board’s preliminary views and requests constituent input on certain matters Non-performance risk The Board noted that IFRSs currently do not discuss non-performance risk in relation to the fair value of liabilities. IAS 39 requires the fair value of a financial liability to reflect the credit quality of the instrument. Reflecting credit quality in the fair value measurement of a financial liability effectively causes the fair value measurement to reflect the risk that the obligation will not be fulfilled. FAS 157 extends this principle to the fair value measurement of both financial and non-financial liabilities. It was noted that non-financial liabilities include both credit risk (which related to the financial component) and non-performance risk (which related to the activity). After some discussion, the Board agreed to include a preliminary view in the invitation to comment agreeing with the concept that the fair value of a liability should reflect the non-performance risk relating to that liability (in addition to credit risk). Issues in the Invitation to Comment Entry and exit prices The Board agreed that the Invitation to Comment should discuss the concepts of entry and exit prices without stating a preliminary view. The Discussion Paper will address two views without stating a preference. The discussion note that the notion of a price established between ‘a willing buyer and a willing seller’ matters only when one is shifting markets. In many IASB standards, ‘fair value’ is used to mean an exit price; in a few (such as IFRS 3, IAS 39, and IAS 41), the phrase is used to mean an entry price. Board members found using the same phrase to communicate two different measurement objectives confusing. Board members noted that they might need to reassess the measurement objective in IFRS 3, IAS 39, and IAS 41 should they adopt the approach in FAS 157 paragraph 17(d), which allows the use of a price other than the transaction price to represent fair value if the transaction occurred in a market other than the principal or most advantageous market. The staff proposed wording ‘on the fly’, which they will bring back to the Board. Principal or most advantageous market IAS 39 requires an entity to use the most advantageous active market in measuring the fair value of a financial asset or liability when multiple markets exist, whereas IAS 41 Agriculture requires an entity to use the most relevant market. By comparison, the FAS 157 requires an entity use the principal market for the asset or liability. In the absence of a principal market for the asset or liability, the entity uses the most advantageous market. The principal market is the market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability. The most advantageous market is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received for the asset or minimizes the amount that would be paid to transfer the liability, considering transaction costs in the respective market(s). In either case, the principal (or most advantageous) market (and thus, market participants) should be considered from the perspective of the reporting entity, thereby allowing for differences between and among entities with different activities. The Board reconfirmed their view taken in May 2006, namely: When multiple markets exist for an asset or liability, the fair value measure should be based on the principal market for that asset or liability. If there is no principal market, the most advantageous market should be used. In both instances, the principal or most advantageous market should be determined from the perspective of the reporting entity. A question will be asked on this topic in the Invitation to Comment. Calling ‘level 3’ measurements ‘fair value’ The Board noted that FAS 157 establishes a three level hierarchy for categorising and prioritising inputs for fair value measurements. Level 3 of the hierarchy is ‘unobservable inputs’ for the asset or liability (that is, they are not observable in a market). Unobservable inputs are used to measure fair value only to the extent that observable inputs are not available. These inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). When Level 3 measures are used, FAS 157 prescribes additional disclosures. The Board agreed that the disclosure requirements in FAS 157 highlight sufficiently the nature of the fair value measurement so that users of financial statements can develop a view of the potential uncertainty of that measurement. Therefore, it would not be necessary to include in the Discussion Paper a discussion of whether measurements comprised of significant Level 3 inputs should be labelled something other than fair value. Block premiums and discounts The Board agreed to address the issue of whether block premiums and discounts should be discussed in the Discussion Paper. Such premiums or discounts may arise when a larger-than-normal quantity of an asset or liability is being sold in a market. Board members noted that the requirement to use the ‘Price x Quantity’ formula is limited to Level 1 measures, and that this opens the treatment of block purchases and sales to abuse, since it could be argued that these should be measured using Level 2 or 3 inputs. Board members also agreed that there is a need to distinguish illiquidity caused by the size of the block from that caused by the thinness of the market. The staff will draft a question on this issue for inclusion in the Invitation to Comment. Day 1 gains and losses The Board noted that an exit price measurement objective could have significant implications on certain fair value measurements in IFRSs, particularly in IAS 39 on initial recognition. They reasoned that it is important to highlight situations where the guidance in FAS 157 differs significantly from current IFRSs. Further, convergence on the day-one gain matter is a high-profile issue to many large financial institutions and is an area where the staff expects many comments. The Invitation to Comment will contain a discussion and question on the transaction price presumption. US GAAP-specific material contained in FAS 157 The Board agreed that, in the interests of timely publication, they would not alter FAS 157 in any way for the purposes of the Discussion Paper and Invitation to Comment, and that it would therefore have US GAAP-specific material. The Invitation to Comment would note that any Exposure Draft would be IFRS-specific. Next steps On a poll, 12 Board members voted to issue the Invitation to Comment and Preliminary Views, and one Board member abstained, pending resolution of the discussion of entry and exit prices. The Discussion Paper is scheduled for publication in late 2006. November 2006: Discussion Paper Issued On 30 November 2006, the IASB published for public comment a Discussion Paper on Fair Value Measurements. The Discussion Paper sets out the IASB’s preliminary views on how to measure fair values when fair value measurement is already prescribed under existing IFRSs. It does not propose any extensions of the use of fair values. The DP is built around FASB’s recently issued SFAS 157 Fair Value Measurements. SFAS 157 establishes a single definition of fair value together with a framework for measuring fair value for financial reports prepared in accordance with US GAAP. Click for IASB Press Release (PDF 53k). The Discussion Paper will be available without charge on the IASB’s website starting 11 December 2006. Comment deadline is 2 April 2007 [extended to] 4 May 2007. The IASB plans to publish an Exposure Draft in 2008. Discussion at the January 2007 IASB Meeting Extension of the comment deadline on the Discussion Paper The staff reported that several constituents had asked the Board to extend the deadline for comments on the Board’s Discussion Paper Fair Value Measurements. The constituents highlighted that the comment period coincided with the financial reporting season for those with calendar year ends and asked for more time so that an important and complex document could receive the attention it deserved. The Board agreed unanimously to extend the deadline for comments to Friday 4 May 2007. Discussion at the September 2007 IASB Meeting The staff informed the Board that the FASB had formed a Valuation Resource Group (VRG). The purpose of the VRG is to provide the FASB with input for clarifying the guidance related to the application of the principles in SFAS 157 Fair Value Measurement when fair value is required or permitted under US GAAP. The VRG is drawn from accounting firms, valuation advisers, preparers, users, regulators and standard setters. The first meeting of the VRG is planned for 1 October 2007. Issues raised at that meeting will be brought to the October FASB meeting. The IASB staff noted that any decisions made by the FASB are likely to have implications for valuations performed under IFRSs because constituents may apply the US guidance in the absence of IFRS guidance. The staff will keep the Board informed of the project. No decisions were made. Discussion at the October 2007 IASB Meeting The staff presented their analysis of comments received on the IASB’s discussion paper on fair value measurement. The discussion paper was issued as a ‘wrap around’ of FASB Statement of Financial Accounting Standards No. 157. The complete analysis is available in the Observer Notes section on the IASB’s website (Agenda Paper 2C). The staff asked the Board to do the following: †¢ consider the main points raised in the comment letters (136 received); †¢ affirm the project objectives; and †¢ approve the staff’s preliminary project plan. The main points raised in the comment letter by constituents included (please refer to Agenda Paper 2C for a detailed analysis): †¢ General agreement to that the fair value measurement project is needed; †¢ Concerns about how to provide guidance on determining fair value when it is not clear in hich circumstances; †¢ The interaction between the fair value measurement project and the conceptual framework project (in particular, phase C which covers measurement); †¢ The view that in many situations an entry price notion is superior to an exit price notion; †¢ Fair value is more akin to a heading for a ‘family’ o f measurement bases and accordingly terms should be used which are more descriptive (that is, more clearly articulate what the Board’s intended measurement basis in that situation is); and †¢ With regard to measuring liabilities at fair value, the respondents raised concerns about the application of a transfer notion instead of a settlement notion and asked for guidance as to the meaning of non-performance risk. Regarding the interaction between this project and the Conceptual Framework project, some Board members noted that the outcome of this project is only one of a number of possible measurement bases that will be in the revised Framework. Consequently, the impact on the Framework project is only minor. The staff confirmed that it consults with staff of the Framework project on a regular basis. Some Board members observed that the notion ‘entry price’ should be as well defined as ‘exit price’. Staff noted that this is part of the proposed pr oject plan. No decisions were made. The Board was also asked to agree on the following project objectives: †¢ Development of principles and measurement guidance for an exit price measurement basis; and †¢ Completion of a standard-by-standard review of fair value measurements permitted or required in IFRSs to asses whether each standard’s measurement basis is an exit price. If the Board does not agree, will it agree to decide on a case-by-case basis whether or not to develop measurement guidance for those other measurement bases. The Board agreed to both objectives. On the second bullet point, it was clarified that this analysis will not lead to the development of additional guidance for those measurement bases that will be identified as not fitting in the definition of fair value for the purpose of the fair value measurement project. However, the Board noted that a working definition for fair value must first be agreed on before the analysis can be done. Additional Discussion at the October 2007 IASB M eeting This was an education session and accordingly no decisions were made. The session was led by representatives of the valuation profession to illustrate practical valuation concepts and issues (the complete presentation [Agenda Paper 11A] can be obtained from the Observer Notes section on the IASB Website). The focus was on the valuation methodologies used in the measurement of tangible and intangible non-financial assets. The background of the session was the Discussion Paper on Fair Value Measurements that was issued by the IASB in November 2006. The main topics of the presentation were: †¢ Value concepts in IFRSs †¢ The purchase price allocation process Overview of valuation methodologies (that is cost approach, market approach, income approach) The presenters’ main focus was the valuation requirements resulting from a business combination and what are the factors valuation professionals consider in such transactions. Although this was an education session only the Board showed particular interest in certain topics of the presentation: †¢ If and how appraisers exclude entity-specific factors from their valuation models †¢ Customer-related intangible assets (separation and assumptions used in valuation) †¢ Consideration of tax in the valuation process †¢ Separation and valuation of contingent liabilities On the last point, the representatives of the valuation profession admitted that they have difficulties identifying all contingent liabilities and how to value them based on a transfer notion (that is what would an entity have to pay to pass on the risk – in contrast to a settlement notion). Discussion at the November 2007 IASB Meeting The staff began the morning session by informing the Board about the latest developments in relation to the implementation of SFAS 157 Fair Value Measurements which is the basis for the Discussion Paper published by the IASB. The developments included the deferral of the effective date of SFAS 157 for non-recurring measurements (for example in business combinations). It was noted that these developments would have no impact on the IASB project on fair value measurements. The staff presented its preliminary definitions of ‘current exit price’ and ‘current entry price’ for assets and liabilities that will be used in the standard-by-standard review. The Board and the staff reiterated that they do not want to change the measurement within the standards. The goal of the analysis carried out by the staff would be to find out which measurement attribute the Board and its predecessor (the IASC) had in mind when using the term ‘fair value’. The preliminary working definitions of the staff are as follows: †¢ Assets: Current entry price: The price that would be paid to buy an asset in an orderly transaction between market participants at the measurement date. o Current exit price: The price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. †¢ Liabilities: o Current entry price: The price that would be received to incur a liability in an orderly transaction between market participants at the measurement date. o Current exit price I (transfer notion): The price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. o Current exit price II (settlement notion): The price that would be paid to settle a liability in an orderly transaction at the measurement date. At the request of a Board member staff confirmed that possible components of fair value will be addressed in later stages of the project. The staff also confirmed that it will involve practitioners to gain insight into current valuation practice in the specific circumstances. The Board had a short discussion on certain aspects of fair value measurement and was informed by staff that some of the issues will be discussed at the December Board meeting. The Board agreed on the preliminary definitions of current entry price and current exit price for assets and liabilities and that staff should not consider other measurement bases for the purpose of the standard-by-standard review. Discussion at the December 2007 IASB Meeting The purpose of this session was to continue the deliberations on the issues in the Fair Value Measurements Discussion Paper and to present an analysis of the ‘market participants view’ under SFAS 157 compared to the ‘knowledgeable, willing parties in an arm’s length transaction’ in IFRSs. After staff review of the two approaches, the Board was asked if it agrees with the staff analysis on the market participants view. Some Board members raised concerns about the possible differences of the notion ‘market participants view’ in comparison to a ‘knowledgeable, willing party’. The staff noted that they see no differences in content. One Board member asked why a change in terminology would then be necessary as constituents are familiar with the notion of a ‘knowledgeable, willing party’. Other Board members said that the document must make clear that the terms are interchangeable. After this the Board discussed what a market is and whether, for certain transactions, one can assume a market exists if, for example, actually only two parties are acting. As no definition of ‘market’ was provided, the Board asked the staff to develop an analysis. As all further discussions depend on the outcome of that analysis the Board agreed to postpone discussion of the other items in the agenda paper to a later Board meeting. No further decisions were made. Discussion at the March 2008 IASB Meeting Whether the fair value measurement project should have a working group or other type of specialist advisory group The Board has on its agenda a project on fair value measurement that aims to provide guidance on how to determine fair value if a standard requires or allows fair value measurement. The staff informed the Board that it worked under the assumption that a working group would not be required as there is an overlap with existing working groups that could be involved as required. On further reflection, the staff has concluded that this approach does not work as it proved difficult to involve the other working groups without a clear mandate. The staff also believes that it would not be necessary to set up a formal working group but instead to establish a ‘technical advisory group’ (TAG) that could work on a informal, as-needed basis. Information exchange could be done in person or via electronic communication. However, the IASB Due Process Handbook requires the Board’s consent for not establishing a working group for a major project. One Board member raised the question whether the Valuation Resource Group of the FASB could be involved. The staff answered that this group would interpret and implement SFAS 157, the US standard providing fair value measurement guidance. The Board agreed not to establish a working group, but to form a technical advisory group instead. Discussion at the April 2008 IASB Meeting Representatives of the International Valuation Standards Committee (IVSC) presented an education session to the Board on four valuation issues. No decisions were made at this education session. The four issues presented by the IVSC delegation were: †¢ What is the difference between ‘price’ and ‘value’? †¢ Is there a valuation difference between an entry and an exit price? †¢ Highest and best use †¢ What makes the market? What is the difference between ‘price’ and ‘value’? The representatives made clear that in their view ‘price’ is the amount agreed on in a transaction while ‘value’ is the outcome of a valuation. In practice, most valuations assume a transaction but, depending on the purpose of the valuation exercise, a value could also be entity-specific. It was made clear that in many cases price and value would result in (nearly) the same number. It was also noted that the IVSC standards use three types of valuation with two of them taking a market view and one of them being an entity-specific approach – which could possibly result in different amounts for the same valuation object. Some Board members were confused by the terminology used by the presenters and it was agreed that this could be the cause for much confusion within the constituency and that any communication by the Board must clearly articulate what they mean. One Board member noted that ‘value’ must always be accompanied by an adjective as people understand different things in different situations. Other Board members were confused about where the difference in amounts results from. The IVSC representatives explained that there are many reasons (for example, synergies). Is there a valuation difference between an entry and an exit price? The delegation moved then on to the second question. The representatives explained that the profession holds the view that for non-entity-specific values entry and exit price for the same market should be the same. Often a perceived difference results because entry price is determined on a different market than the exist price. The Board had a lengthy discussion on that issue with a view on the guidance in US GAAP. Highest and best use The highest and best use is terminology from the US GAAP standard SFAS 157 Fair Value Measurements that assumes an entity would also use its asset the best way it can. It was highlighted that the SFAS 157 definition is very similar to the IVSC one. It was noted that this is not a different type or basis of value and that it is inherent in any basis that requires the estimate of an open market transaction. Some Board members expressed their doubt that this always could be assumed for liabilities. What makes the market? The representatives explained that there is an opinion that fair values could only be made where active markets exist. They made it clear that in their view this is not the case. The valuation profession assumes as long as there is enough evidence to establish a valuation it is assumed that a market exist even if the degree of reliability is lower than that for a market with frequent transactions. They would not necessarily link value and liquidity. The Board showed interest in the valuation for some of the instruments where markets have contracted recently and had some debate on that point with the representatives. The Chairman closed the session by asking the IVSC representatives if they have experts on valuing liabilities that could participate in the planned IASB technical experts group. The representatives confirmed that such experts would be available to participate in the group. Discussion at the May 2008 IASB Meeting Discussion of the Meeting of the IASB Expert Advisory Panel on Valuing Financial Instruments in Illiquid Markets The issue was added to the agenda with short notice and no observer notes were available. The staff informed the Board that the Financial Stability Forum has established an expert advisory panel to assist the IASB in enhancing its guidance on valuing financial instruments when markets are no longer active. In addition the staff noted the following: †¢ The first meeting will take place on 13 June 2008. †¢ At the first meeting the panel will decide on the form of guidance issued, e. g. est practice guidance or input for amendment of standards. †¢ The duration of the panel is expected to be two or three months. June 2008: IASB Forms an Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets On 5 June 2008, th e IASB formed an expert advisory panel on valuation of financial instruments in inactive markets, in response to Recommendations made by the Financial Stability Forum (FSF). The new panel will assist the IASB in: †¢ reviewing best practices in the area of valuation techniques, and †¢ formulating any necessary additional practice guidance on valuation methods for financial instruments and related disclosures when markets are no longer active. Organisations participating in the panel include AIG (American International Group); Basel Committee on Banking Supervision; BNP Paribas; Capital International Research Inc. ; Citigroup; Deloitte; Deutsche Bank; Ernst Young; Financial Stability Forum; Fitch Ratings; Goldman Sachs; HSBC; International Association of Insurance Supervisors; International Organization of Securities Commissions (IOSCO); KPMG; Pioneer Investments; PricewaterhouseCoopers; Swiss Re; and UBS. FASB will have a staff observer. The first meeting of the panel will take place on 13 June 2008 in private session. A summary of the meeting will be presented to the IASB at its June 2008 meeting and will be published on its website. More Information on IASB’s website. Related resources are available on our Credit Crunch Page. Discussion at the June 2008 IASB Meeting [pic]Fair Value Measurements – Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets: Meeting update The staff presented a summary of the first meeting held on 13 June 2008 of the Expert Advisory Panel. The staff noted that the purpose of that meeting was to identify the issues arising on valuing financial instruments when markets are no longer active and that possible solutions will be discussed at future meetings. In addition the staff noted the following: †¢ No decision was made regarding the form of guidance the panel will provide, e. g. best practice guidance or input for amendment of standards. Subsets of the issues identified will be discussed by a subgroup of panel members at the next meetings in July (measurement issues) and August (disclosure issues). Meeting dates have not yet been confirmed. The meetings will be held in private sessions with public updates being provided at the July and September Bo ard meetings. †¢ The last meeting is expected to be in September 2008. Updates on the activities of the panel are also available on the IASB’s website. Discussion of the Fair Value Measurements Project Following the joint IASB-FASB meeting in April 2008 the Board discussed the way forward in this project. At the joint meeting the IASB decided not to re-debate all aspects of the Fair Value Measurement discussion paper (the DP), i. e. ot to fully re-debate FAS 157 Fair Value Measurements on which the DP is based. Instead the Board agreed to redeliberate certain areas of confusion or areas in which FAS 157 had proved difficult to apply. The staff presented an analysis of issues raised in the DP and provided recommendations on whether a particular issue should be redeliberated or not. Technical aspects of fair value measurement were not discussed at this meeting. The Board agreed to discuss further the topics listed below. These topics will be redeliberated mainly because th e Board did not express a preliminary view in the DP and/or comments received on the DP indicated a need for further discussion: The exit price measurement objective The Board agreed to consider both entry and exit notions of fair value measurement based on the standard-by-standard review currently performed by the staff. The market participant view In general the Board reaffirmed its preliminary view in the DP. However, the staff was asked to improve the wording in order to address concerns raised by constituents. In particular, it should be clarified how to apply the market participant view in cases where no market exists (for example, liabilities that cannot be transferred). Transfer vs. settlement of a liability The Board agreed to a staff analysis that this is an important cross-cutting issue for other Board projects, particularly, amendments to IAS 37. Transaction price and fair value at initial: Day one gains and losses This issue is considered to be interrelated with the entry vs. exit price issue. The principal (or most advantageous) market The Board reaffirmed the preliminary view in principal but noted that questions about the practical application needs to be resolved. Valuation of liabilities: Non-performance risk There seemed to be a broad consensus to reaffirm the preliminary view that non-performance risks needs to be considered when measuring the fair value. However, the majority of Board noted that this is an important cross-cutting and that there are unresolved issues with regard to presentation (of the counter-entry) and disaggregation. Highest and best use The staff intends to address comprehensively all issues relating to ‘different markets’. Bid-ask spreads: Applicability of mid-market pricing to all levels of the hierarchy? The staff noted that the Board still needs to reach a preliminary and that the question of which transaction costs are to be included will be addressed in this context. Issues not discussed †¢ Disclosures: Redeliberation in light of current market environment †¢ Application guidance: Redeliberation in light of current market environment Topics not to be redeliberated The Board decided not to redeliberate the following five topics: 1. Attributes (characteristics) specific to an asset or liability 2. Whether transaction costs are separate from fair value The staff intends to discuss any outstanding issues in connection with bid-ask spreads. (this sentence relates to bullet 2) 3. Three-level fair value hierarchy Accepted as described in the Discussion Paper without any further deliberations 4. The prohibition of blockage factor adjustments at all levels of the hierarchy The Board had a thorough debate on this issue. One Board member emphasised that the majority of constituents disagreed with the preliminary view expressed in the DP. Finally, there seemed to be a consensus not to redeliberate the issue but to deal with the concerns in the feedback statement. The staff was asked to review the comments received to ensure that the Board ‘has not missed anything’ in reaching the preliminary view. 5. The unit of account for financial assets and liabilities The staff noted that the topics not to be discussed by the Board are broadly consistent with the principles in IFRSs and that they can therefore be addressed in the exposure draft in a way that considers the concerns raised by constituents and is consistent with FAS 157. Discussion at the July 2008 IASB Meeting – Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets: Meeting update The project manager on the fair value measurement project gave an oral update on the activities of the expert advisory panel. The purpose of this panel is to assist the IASB in reviewing best practices in the area of valuation techniques as well as formulating any necessary additional guidance on valuation methods for financial instruments and related disclosures when markets are no longer active. The panel or subgroup met three times. At the kick-off meeting the panel identified specific issues that panel members felt must be addressed (such as forced transactions, the use of pricing services, illiquid markets). It was noted that there seemed to be consistency in applying the fair value measurement requirements in IAS 39 despite the use of different techniques. The staff informed the Board that there will be a draft document to be discussed end of July on those issues, but that it is not clear yet who will publish it. The panel would then turn to appropriate disclosures with the aim to have an exposure draft published in Q4/08. It was noted that there would be ongoing communications with the consolidations project team. Discussion at the July 2008 IASB Meeting At this session the staff asked the Board to decide on a definition of ‘fair value’ – what is the measurement object for items with a measurement basis currently referred to as ‘fair value’? The staff acknowledged that some aspects of fair value have not been discussed yet, but will be brought to the Board at future meetings (for example, principal market and day-one gains/losses). Staff’s view, however, is that whether fair value means an entry or exit price can be decided separately. The staff then turned to the standard-by-standard review as requested by the Board. This review had been requested to help the Board to decide whether: †¢ To retain the term ‘fair value’ and define it appropriately, or †¢ To replace the term ‘fair value’ with more specific terms more appropriate in the individual context. It was noted that a consistent definition of fair value might lead to fewer instances where the Board would require or permit its use. It was also highlighted that a precise definition of fair value would help to ensure proper application where it is required or permitted. The Board had a lengthy discussion about whether entry and exit price would be the equal for the same item on the same date in the same market. Also, the Board discussed which market an entity should refer to in measuring fair value and whether an exit price could include exit by consumption of assets. Board members expressed a range of views on these issues. No clear consensuses were reached. Some Board members observed that if the Board cannot clearly define what fair value means, it would be even more difficult for constituents in applying IFRSs. Board members said that some of the issues that are to be brought back for discussion at future meetings must be resolved before the Board can agree on a definition of fair value. The staff also asked the Board to consider whether to keep the term ‘fair value’ or abandon it. The Board seemed to be split on that issue. The Board discussed whether, in measuring the exit-price fair value of an asset the entity is using, the measurement should take viewpoint of the entity or of an independent market participant. Board members’ views varied, and no decision was reached. The staff distributed a flow chart which was not part of the observer notes that was intended to facilitate the discussion. The Board decided that, once fair value is precisely defined, each reference to fair value in IFRSs should be assessed in relation to the definition. Where ‘fair value’ as used in an IFRS is not consistent with the agreed definition, the term should be replaced with a more descriptive term. Discussion at the September 2008 IASB Meeting – Credit Crisis: Proposed amendments to disclosure requirements Please see separate project page on Amendments to IFRS 7 – Credit Crisis Discussion at the September 2008 IASB Meeting – Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets: Update The staff presented the Board with an update on the work of the expert advisory panel formed in response to recommendations from constituents. The panel’s task is to develop best practice guidance on measurement and disclosures for financial instruments in inactive markets. It was noted that the panel had met six times and will meet again in October. One single document would be published covering both measurement and disclosure. A draft report has just been posted on the IASB’s website. The staff informed the Board that although comments would be solicited until 3 October, comment letters would not be published on the IASB’s website. Asked by a Board member, the staff confirmed that this non-mandatory guidance would be considered when developing the fair value measurement standard and, hence, might become mandatory in the future. Discussion at the September 2008 IASB Meeting – Fair Value Measurements Exposure Draft The staff introduced the session by highlighting the objectives and timeline. The purpose of the session was to seek the Board’s decision on: †¢ Whether a fair value measurement exposure draft should state that fair value reflects the highest and best use of an asset; and †¢ Whether blockage factors should be excluded from fair value measurement. Blockage factors The staff started with the second issue on blockage factors. The staff highlighted that it only sought the Board’s input on this type of discount, not on other discounts or premia. The staff defined a blockage discounts as a discount that represents a discount to the quoted price of an instrument (usually equity securities) to reflect the reduction in the price if the entity were to sell a large holding of instruments at once. The Board had a lengthy debate on this. Some Board members were concerned about ignoring blockage factors as they would represent a real economic phenomenon. Others were of an opposite How to cite Fv Project Summary of Fasb and Iasb, Essay examples

Marketing Plan for the Fitness Company-Free-Samples for Students

Question: Discuss about the Sales and Marketing Plan for the Fitness Company. Answer: Background This report is basically discusses about the e-marketing and social media plan about the fitness company named Fitness First. The company Fitness First is one of the health and fitness companies operating in United Arab Emirates. The company is focused on providing world class facilities for fitness i.e. best in class equipments, innovative programs, cardio, free group exercise and various membership privileges (Landmark Fitness Limited, 2017). The company is now launching a new mobile app and android food online nutrition plan for the customers of Fitness First. Customers of the company can use this nutrition plan for their healthy diet plan such as morning breakfast plan and reducing weight in a week etc. Along with this, from the online store of Fitness First, customers can purchase some products such as smoothies, protein shakes, salads, healthy soups etc. The report focuses on the media plan in order to launch and attract the customers for this mobile application. This report pr ovides a digital and social media plan for the company to enhance the awareness about the mobile application of food online nutrition plan. Situational analysis and challenges Macro and Micro environment The micro and macro environmental factors are to be framed and developed to understand the business details. Along with this, they are to be critically analyzed and linked with the specific variables which are to be accepted and considered effectively. Macro factor Political and legal- The political and legal framework of UAE is properly applied to the business and its policies as the Fitness First is oriented to the health and fitness attributes of people. Company is to be bounded by the local and regional laws and governing policies of UAE. Economic- The economic activities are also integrated within the business conditions and orientation as the economic opportunities of UAE impact on the business activities of Fitness First. The Company Fitness First is positioned itself as the premium company for the fitness of people so, the company has opened its stores at the sleeted regions where the purchasing power of products is high. The economic activities are also integrated within the business conditions and orientation as the economic opportunities of UAE impact on the business activities of Fitness First. Socio-cultural- This is the most important aspect which is analyzed to understand the personal and professional details of the social class people. The changing social and cultural aspects are favorable for the company Fitness First as people are concerned towards the health and fitness attributes in the changing society (Pealoza, Toulouse Visconti, 2013). Technological- The company Fitness First is technological innovative company. It can be seen by the new mobile app which is developed for those customers who are health conscious and want to keep their health maintain with the effective nutrition and diet plan. This mobile app is helpful for the company in getting and retaining more customers as they are going online for purchasing products and services so, this mobile app is going to be successful in the fitness industry. Micro analysis Consumers Today, customers are technology savvy and they are active on various online media platforms. In case of Fitness First, people are concerned for their health and they are seeking for the diet plan under the professionals. So, for the food nutrition plan app will target those customers who want to maintain their health and enjoy health and tasty meal every day. Employees Employees are to be trained and perceived as the most significant factor for the companies. Fitness First Company is the popular fitness club among the customers and employees of the company are focused on providing various services based on the requirements of the customers. With more sustainable and perceived services, company can retain and maintain the customers (FitnessFirst, 2017). Competitor analysis In United Arab Emirates, the company Fitness First is doing well in the operating market. It is analyzed that there are various competitors in the market that are providing similar services to the customers at the cheaper rates. Along with this, they are also very active on social media to stay connected with the customers. Further, various international sports and fitness brands are set to dominate the market. There are some famous fitness brands i.e. Revolution fitness, SMART fitness and Regime fitness that are giving strong competition to the company Fitness First. These companies are also focusing on the digital and social marketing platforms to attract more customers in the market. Along with this, they are gaining more market share by their effective communication with the customers and this is the big threat for Fitness First. Companies Services Tools Revolution fitness Instructors for fitness, Different classes including spinning, strength training, TRX, Indo Row, Core barre and Yoga Email marketing, SMART fitness Personal training and fitness classes Website and Email marketing Regime fitness Personal training, weight loss, corporate wellness, Yoga, boxing and material arts Social media, website, and personalize marketing Opportunities and threats Fitness First Company has biggest opportunity to build up and enhance the relationship with the customers by developing the mobile app and providing the healthy products and services by the android application. Company also has opportunity to make nutrition and diet plan of the customers based on the needs and requirements of their body. Along with this, company also has opportunity to interact the customers and response to their feedbacks related to the new mobile application. Company Fitness First should make more efforts at responding the comments of the customers. Along with this, company can use simple tactic revert to the nice comments regarding application to generate effective communication and make the customers feel special. Along with this, another big opportunity for the company is older demographic that uses online platforms (Armstrong, Kotler, Harker Brennan, 2012). Competitors are the biggest challenge for the online nutrition plan app as they can also provide similar products and services at through this digital media tool. By this, they can also interact with the customers which are important for enhancing brand loyalty. Along with this, relationships are also built by engaging in the conversation on multiple platforms. Further, another threat for the nutrition plan app is risk of damaging the brand image if customers do not like the app and Target market analysis A well-defined target market is the main and key element for the effective marketing tactics. The target market for nutrition plan app is devided into six distinct customer profiles. The target markets of the company are those people who want to have healthy meal all the day. All of the profiles of the target people are different from each other in terms of preferences, motivations, objectives and requirements that should be exclusively fulfilled and approached. The profile of the customers are segmented based on various different segments i.e. age, family size, stage of family life cycle, gender, income, and the their fitness style. The target customers are described by Fitness Firsts own brand tactic which is as follows: The first trait of the target customers for Fitness First is busy and active life family. These types of people have to do various outdoor activities in their daily life. So, they are most interested in eating such food that gives them energy for whole day. They are not the most internet confidence of the brands target market but rely on the online shopping occasionally. Their key objective is to some good time with their family. The second target people are middle-aged, single mother along with low to normal income level. These target customers typically has no record at the online platforms but they are seeking for healthy food for themselves and focusing on the diet plan. For these types of customers, mobile application will be most effective tool. Next trait of the target customers is elderly but active couple. The customers focus on the exercise to stay fit and healthy. For this, they need a balanced diet in their daily meal. These customers are internet savvy so, convincing them by the mobile app of nutrition plan will not be challenge for the company. Fourth target customers are family men. These people usually have high income level, strong interested to keep their family active and healthy. The customers need a complete diet package for their family. These customers do not basically have time to visit to the professionals so; this mobile app will be helpful for them to get their desired products. Next target customers for nutrition plan app are new mother. All the new mothers have the challenge to find the time to exercise in their daily life. Their key objective is to get back in their shape so, they need nutritious but tasty food in daily life. This specific market is very easy to target (Kotler, Li, 2011). Next and last target markets are younger and fit male customers who do weight lifting and use supplements. Their key objective of these customers is to be in shape and live healthier life. To stay healthy, they need advice of professionals to maintain their diet. So, this nutrition plan app will be helpful for the company to attract these customers. Unique selling points For the success and unique selling proposition of nutrition plan mobile app depends upon various advantages provides by the company to its customers. Along with this, it also includes unique quality of the application. In case of nutrition plan mobile app, Fitness First is providing this app to encourage the customers to adopt health and balanced diet in their daily lives. This mobile application is also providing various healthy food products to the customers who are concerned for their health. Unique selling point of the app is usefulness of this app as it is helping the customers to maintain their diet and health without going physically to the professionals. Further, the app has some benefits also like saving money and makes the customers smarter to use the online platforms to stay fit and healthy. Objectives For the nutrition plan app by Fitness First, there are some objectives and goals of the business which must be achieved by the e-marketing plan. Those objectives will be considered as SMART objectives including specific, measurable, achievable, realistic and time-based. The key objective of this report is to enhance brand awareness of the app, increase revenue and attract many customers for this mobile app SMART objectives for the nutrition plan application are as follows: Specific Company Fitness First is launching a new mobile app for nutrition plan. This online nutrition plan will be helpful in meeting specific requirements of the customers like by nutrition and diet plan, customers can reduce their weight and balance plan etc. The objective is specific as the mobile app is able to provide nutritious and health food plan by the online media tool. Measurable The objective of nutrition plan mobile app can be measured with the help of Google analytics. It is observed that the app is mostly downloaded by elderly but active couple. The customers focus on the exercise to stay fit and healthy. Along with this, the app is mostly downloaded by mothers who need nutritious but tasty food in daily life. It will also be analyzed that from which play store; the mobile app will be downloaded by the customers. Achievable Improving the customers experience is achievable for the company by the digital media strategies. It is possible for the company to satisfy the customers with the needed fitness technology and equipments. The goal of customer satisfaction is better and can be achieved by the customer interaction process. Relevant The objectives of the company are the goals are realistic as they are challenging for the company in the highly competitive industry. The success of these objectives depends upon the effective marketing and communication strategies adopted by the company Fitness First. Time frame This is the final factor of good objective. For achieving these stated objectives, company would set time for 12 months. Time makes the objective real and tangible. Within the set time, company would train the employees for achieving the set goals and objectives. Analysis of e-marketing and social media techniques This part explores the concept of online and social media tools and techniques for the marketing purpose. These concepts can be helpful in outlining what needs to be measured and included in the setting up a social media marketing tactic. It is also important to have a perceptive of the theoretical idea while launching new nutrition plan mobile app. Digital marketing- Digital marketing is the high speed and low cost platform which has become basic part of marketing. By the use of various features of traditional marketing such as print, radio and TV, the awareness about new mobile application will be increased (Ryan, 2014). In the e-marketing channels, there are six types of channels including search engine marketing, Online PR, online partnership, display advertising, Opt-in-email marketing, and Social media marketing. All these methods will be used to launch the mobile app and to target the customers in all over the world along with building a strong presence for the company (Sashi, 2012). Social media marketing There are various companies using the social media marketing in the effective way. Social media marketing can be described as managing and monitoring customer-to-customer communication and their contribution by the web to enhance positive relationship of the company with the customers. Social media shares various aspects with the traditional marketing such as text, photographs and videos. In case of nutrition plan mobile app, internet and social media will be used to generate their own matter in all over the world (Luttrell, 2016). By the use FaceBook, Twitter, LinkedIn and various social media sites, company will promote its new application. Word-of-mouth will be used as most effective marketing methods by which company will be able to share important information instantly in all over the world so, it is more powerful (Flynn, 2012). Pros and cons Social media marketing can be an effective way for the company to enhance the awareness about the services among the customers. But it is not all about advantages and benefits. There are some cons and challenges also with the social which must be addressed while using social media in the business operations. Some of positive and negative characteristics related to social media marketing for the business are discussed below: Pros Cons As compared to traditional media like print and television advertisement, the cost of social media is relatively low. With social media, companies can attract the potential customers as everyone is active on internet now (Mills, 2012). Social media tools are useful in the relationship building including dual sided communication with the customers. Many people are not interested in socializing and interacting with a specific brand. It can be difficult for the companies to find right content for the target audience to engage them with the business. Social media is time consuming. Building relationship with the customers can take lots of time. It can take months to develop and make the brand image strong of the company. There is the need of investment in social media marketing and not to expect instant result. Critical success factors In the rapidly growing market, it is important for the Company Fitness First to understand the consumer mind. Competitors are gaining market share continuously so, it is crucial for the company to come in the spotlight. While comparing social media numbers, Fitness First is much more established and successful. The company needs to take advantage of the social media advantage in the operating market. The success of the social media plan of Fitness First will be determined by reaching mire number of customers in the market as compared to the competitors (Chen et al, 2010). The critical success factor for social media marketing factors depends upon some factors and those are described below: Regular updates on the social media channels, Try to tell the story about the company, product or services and potential customers for the campaign, Participation level of the consumers along with the valid reason of participation, Honesty and authenticity in the campaign which will result in the individuality which make the campaign unique and effective, Enhancing the experience and learning of the customers, Providing an added value within the campaign to the customers i.e. mobile application and a product forum, Embracing experimentation and open for new technology and channels (Hui, 2011) E-marketing strategy There are various new critiques; social media networks status, pictures and videos that are available on the social media platforms. There are 60% of customers using social media to follow, determine and give criticism on the retailers and brands. In case of Company Fitness First, it is important to develop social media and e-marketing tactics before using online media tools as the part of their marketing practices. According to Mrkulic (2012), with a media strategy and building an effective presence on social media, achieving loyalty and commitment of the customers is not possible for the companies. This shows how the e-marketing strategy is essential for the business like Fitness First (Grant, 2010). The e-marketing strategy for Fitness First will focus on developing brand along with the brand image, target market, and positioning. The online media platforms can serve as the efficient marketing opportunity for Fitness First. Along with this, various techniques will be used and adap ted by the company in order to develop social media aspects of the digital marketing efforts (Liu Nie, 2011). In the e-marketing strategy, company will focus on various media platforms based on the distribution of information and those are as follows: Company will use sites for the social content exchange for the distribution of high-quality and relevant information among the potential customers. This platform will indirectly advertise the services of the company including Blogger, LiveJournal, WordPress and YouTube for video sharing and Picasa and Flickr fir photo sharing (Kosner, 2014).Company will focus on the networking sites to communicate with the potential customers. Social networking sites are one of the most powerful marketing tools and effective way to communicate with the target audiences. In this way, Fitness First will focus on some sites like Google Plus, FaceBook, Twitter and professional networks like LinkedIn (Kapferer, 2012). To enhance the brand image and reputation among the customers, company will use social media news services like news sites, web pages and blogs for the customers. Company will also allow the customers to rate those articles. Most popular social media news platforms are Digg and Reddit. In the social media plan, both paid and unpaid media channels will be used. It is assumed that 55% of market will be covered by FaceBook, 25% by Google Plus, 22% by YouTube and 22% by Twitter. 1% marjet will be covered in E-mail marketing by the company (Rohn, 2015). Recommendation There are some recommendations for Company Fitness First. The company should try to integrate and implement lifecycle segment with proper services. Along with this, company should also focus tangible and intangible assets and should introduce more customized services to the customers. The company should focus on high end consumers in particular regions (Pavlou Stewart, 2015). There can be scope for expansion for the company with the mass market. So, company should focus on diversified services including fitness and health attributes for the mass market consumers. Based on the overall discussion, it is observed that the company Fitness First is the leading company providing effective health and fitness services to the customers. Due to strong competition, it is important for the company to make the customers aware about its services and for this manner; social media is the effective way. The e-marketing plan includes various online media tools like FaceBook, Twitter and professional networks like LinkedIn. These social media tools will be helpful for the company to enhance the awareness about the service of the company. Along with this, this media plan will also be helpful for company Fitness First to gain its objectives References Armstrong, G., Kotler, P., Harker, M., Brennan, R., (2012), Marketing : An Introduction. 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Could Catch Up, accessed on 23rd November 2017 from https://www.forbes.com/sites/anthonykosner/2013/01/26/watch-out-facebook-with-google-at-2-and-youtube-at-3-google-inc-could-catch-up/#5098e0e043e2 Kotler, F., Li, H.P., (2011), Social Marketing: Influencing Behaviors for Good, SAGE Publication Liu, G. F., Nie, L. (2011), Research on the Influence of Brand Image on Customer Loyalty in Fitness Club: Journal of Beijing Sport University, 10: 007 Luttrell, R., (2016), Social Media: How to Engage, Share, and Connect. Rowman Littlefield Mills, A.J., (2012), Virality in social media: the SPIN Framework: Journal of Public Affairs, Vol. 12, No. 2, 2012, pp.162-169 Pavlou, P. A., Stewart, D. W., (2015), Interactive Advertising: A New Conceptual Framework Towards Integrating Elements of the Marketing Mix, pp. 218-222 Pealoza, L., Toulouse, N., Visconti, L. M., (2013), Marketing management: A cultural perspective. USA: Routledge Rohn, U., (2015), Social Media Business Models: The International Encyclopedia of Digital Communication and Society, John Wiley Sons, Inc Ryan, D., (2014), Understanding digital marketing: marketing strategies for engaging the digital generation, Kogan Page Publishers Sashi, C. M., (2012), Customer engagement, buyer-seller relationships, and social media: Management Decision, 50(2), pp. 253 272 Landmark Fitness Limited, (2017), INNOVATIVE PROGRAMS, accessed on 23rd November 2017 from https://uae.fitnessfirstme.com/train-with-us