ESSnet on profiling: a project centered on «culture» and process ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

ESSnet on « profiling large and complex MNEs » Objectives and main features of profiling slide 3 The “cultural” changes slides 4 to 9 « Process » changes incoming slide 10 Consultation, dissemination and future work slide 11 Annex slides 12 to 15 ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

=> “enterprises” linked between countries through the EGR ESSnet on « profiling large and complex MNEs » the main objectives of the ESSnet Profiling project As it is presently not possible “to see the whole elephant”, the ESSnet has been assigned to: > describe consistently the same MultiNational Enterprises (MNEs) in all the EU countries => “enterprises” linked between countries through the EGR > support efficient data collection in SBS, FATS, FDI & if possible in STS => a system of statistical units for all business statistics > for direct dissemination and for indirect use (National accounts etc) => most statistical productions concerned ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

Profiling is a method: legal – operational and – accounting ESSnet on « profiling large and complex MNEs » «Cultural» changes in the approach (1): operational & accounts analysis analysis of structure replaces use of pre-existent units found in admin or legal background; the SUs must have collection capabilities Profiling is a method: > to analyse the legal – operational and – accounting > structure of an enterprise group > in order to - establish the statistical units within that group and - their links and - the most efficient structures > for the collection of statistical data ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

> uses the MNEs information system for accounting consolidation ESSnet on « profiling large and complex MNEs » «Cultural » changes in the approach (2): negociation with MNEs delineation, list, names of “enterprises” built with & agreed by the MNEs. Profiling : > uses the MNEs information system for accounting consolidation > takes the (organisational or management) operating segment as a starting point for delineation of economic “enterprises” (IFRS8), but can differ at the end > with the result that an enterprise is (can be): - a single legal unit (if independant) - an enterprise group (i.e a set of legal unit under common control) - a part of an enterprise group. > as “enterprises” are organisational units, their autonomy (in decision making for allocation of their current resources) is an essential characteristic. ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

ESSnet on « profiling large and complex MNEs » «Cultural » changes in the approach (3): ESS cooperation to list the SUs from bottom-up/national to top-down/global analysis Profiling : > drops the previous “smallest combination of legal units” which is usually: - national - bottom-up - usualy non autonomous as basis of the enterprise; > uses “a part of an enterprise group” called “global enterprise (GEN)” which is usually: - top-down - multinational - compulsarily autonomous > and complement it by “truncated enterprises” as national parts of GENs. ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

> For most EU statisticians, a large change to the usual way: ESSnet on « profiling large and complex MNEs » «Cultural » changes in the approach (4):testing ability Is the « enterprise » able to produce structural statistical data ? > For most EU statisticians, a large change to the usual way: - from surveying SUs (statistical units), predetermined in the BR, - to a dialog with MNEs, - using their common language: the standardised business accounting > Leads to necessary pre-checkings, from BR staff: - are the priority variables we need available in the MNE information system at the level of the “enterprises”? - if yes, are they economically significant? > The checkings are to be made uppermost at EU level (then at national level): - are there theoretically consistent data all over the EU? - will we be able to gather them consistently from the truncated national parts of the “enterprises”? ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

=> priority to components of value added ESSnet on « profiling large and complex MNEs » «Cultural » changes in the approach (4) (continued) : Is the « enterprise » able to produce structural statistical data ? > What are the priority variables to check, (statisticians view)? - the usual BR variables (to identify, assess the continuity and link different kind of units, split the populations and stratify); - the SBS variables; as such and as SBS are main providers of NA; the NA themselves; - special attention to outward-FATS statistics, that operate at the MNE level on “enterprises” > How can the MNEs work on checkings (the business view)? - they ask for a priority list; - they want this list to be common to all European countries; - they ask for common questionnaires for priority variables; - they know better accounting data than any other. => priority to components of value added (in an accounting shape), the “core variables” ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

=> priority to components of value added ESSnet on « profiling large and complex MNEs » «Cultural » changes in the approach (5): the language talking the business only common language: the « IFRS » > What are the priority variables to check, (statisticians view)? - the usual BR variables (to identify, assess the continuity and link different kind of units, split the populations and stratify); - the SBS variables; as such and as SBS are main providers of NA; the NA themselves; - special attention to outward-FATS statistics, that operate at the MNE level on “enterprises” > How can the MNEs work on checkings (the business view)? - they ask for a priority list; - they want this list to be common to all European countries; - they ask for common questionnaires for priority variables; - they know better accounting data than any other. => priority to components of value added (in an accounting shape), the “core variables” ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

> Each NSI plays alternatively the 2 roles ESSnet on « profiling large and complex MNEs » « Process » changes incoming: networking and platforming « networking » the global and national statistical units > For the NSI of the UCI country of a MNE, the tasks are: No more registering SUs (statistical units), from admin or legal world, but: - check the global perimeter of the MNE , - visit the MNE, - propose GENs (global enterprises in agreement with the MNE) and TENs, - link the GENs with legal units (can be “m to n” links), - test at world level the ability to produce adequate statistics, - send the resulting TENs to partnering NSIs and discuss with them, > For the partnering NSIs: - receive proposed TENs (and links with legal units) from the leader NSI - validate them (existence, ability, agreement from the national managers) - accept or re-discuss them with the leader NSI > Each NSI plays alternatively the 2 roles ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

Thank you for your attention ESSnet on « profiling large and complex MNEs » consultation, dissemination and future work Our project lasts until the end of 2013, now mainly on testing We try to be in constant coordination with: - the EGR ESSnet on methodological studies - the ESSnet project on Consistency - the EU studies on globalisation (e.g on value chains) and on MNEs - the Eurostat groups on BR, SBS, FATS, NA etc - other interested countries (US, Canada, China …) - international bodies such as OECD, UNECE, etc We will appreciate your comments: pierre.teillet@insee.fr ----------------------------------------------------------------------- Thank you for your attention ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

ESSnet Workshop in Köln ESSnet on « profiling large and complex MNEs » Annex Core variables: the highest priority to test ability for SBS & NA: ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

ESSnet Workshop in Köln ESSnet on « profiling large and complex MNEs » Annex Core variables: reconciliation with the P&L ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

ESSnet Workshop in Köln ESSnet on « profiling large and complex MNEs » Annex Core variables: where to find the right variables in the financial statement? ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007

ESSnet Workshop in Köln ESSnet on « profiling large and complex MNEs » Annex Core variables: what if a complete balance-sheet for the enterprise? ESSnet Workshop in Köln 27-28/10/2011 Division communication externe 2007