Leeway (economy)

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The leeway in the economic sense generally describes a framework within the limits of which certain transactions can be carried out or prices can be negotiated.

General

This economic leeway manifests itself differently in several specialist areas . For example, the term is used in connection with financing ("financial leeway"), with entrepreneurial decision-making and assessment leeway ("entrepreneurial leeway"; sensible commercial assessment ) or as a technical term for the postponement of due payments ("credit leeway" or "swing") used.

Financial scope

In finance as part of business administration, the monetary amount of money available within the framework of the respective income and expenditure is called scope for financing . It is the amount of money that is available to the respective households without borrowing or indebtedness.

In private households, it plays an essential role in terms of purchases, vacation planning and the quality of life. There is also scope for taxation , which can be exploited, for example, through income- related expenses .

In the case of state budgets ( primary balance ), he sets limits for a solid spending policy in the interests of the taxpayer.

Entrepreneurial leeway

The entrepreneurial leeway is determined by the freedom that is available to the individual company for planning , decision-making and negotiation , for investments or human resources . The Berlin Congress of the Federal Association of Energy and Water Management (BDEW) in 2014 was dominated by the thesis and repeated accusation by company representatives that politics interfered too much in economic activity and the "scope for entrepreneurial planning and action" was increasing narrow

In corporate accounting , the method of purchase price allocation means that so-called valuation and accounting leeway is of great importance. When a newly acquired company is included in the consolidated financial statements for the first time, these allow the purchase price to be distributed across the various assets and liabilities taken over in order to compensate for differences between the purchase price and the book value of the company taken over. This is particularly important when it comes to activation .

In negotiations, the negotiating partners usually have a greater or lesser degree of negotiating leeway ; in price negotiations , this is the basis for negotiation .

Credit margin (swing)

As Swing ( English "swing", "rocking", "clearance" ) is defined as in the economy of a temporary credit line as a margin for the settlement of payment obligations in commercial transactions or the margin and the amount within which one party at the other debt may. It is a line of credit granted by two countries in international trade to offset mutual export claims and import liabilities. If the credit line is exceeded, further deliveries within the framework of the compensation business are suspended and payments in foreign currency or gold are due.

The term became widely known through press reports, according to which the GDR , which was suffering from a lack of foreign currency, repeatedly requested a deferment of payments in its dealings with the FRG :

Since 1951 , there had already been a swing as a time margin for balancing balances in interzone trading, amounting to 30 million  DM . In March 1962, shortly after the Wall was built, the GDR requested another swing of DM 3.1 billion, which, however, did not materialize. Since the swing was granted interest-free, the West German economy suffered considerable losses in this way. The Federal Republic of Germany therefore demanded a settlement from 1962 in order to end the constant use of swing by the GDR.

Idioms

  • The financial flexibility of our company does not allow further investments.
  • Unfortunately, the financial scope of our university budget is exhausted.
  • Politicians are increasingly intervening in entrepreneurial leeway. ( BDEW Congress 2014 from June 24th to 26th, 2014)
  • The family benefits office leaves no financial leeway for larger purchases.
  • During his visit on July 24, 1983, the Bavarian Prime Minister Franz Josef Strauss brokered an increase in swing for the GDR, which was weak in foreign exchange, in the form of an interest-free overdraft line granted by the Deutsche Bundesbank for the further processing of domestic German trade.

literature

  • Wolfgang Ballwieser u. a. (Ed.): Handbook IFRS 2011 . 7th edition. Weinheim 2011, ISBN 978-3-527-50587-6
  • Jochen Drukarczyk: Financing. An introduction. 9th edition. Lucius & Lucius, Stuttgart 2003, ISBN 3-8282-0120-2 ( UTB for science , basic knowledge of business administration )

Individual evidence

  1. ↑ Jochen Drukarczyk: financing. An introduction. 9th edition. Lucius & Lucius, Stuttgart 2003
  2. ↑ Household- related services: judges expand the scope for deduction . test.de , August 6, 2014, accessed November 1, 2014
  3. ↑ BDEW Congress 2014 from June 24 to 26, 2014
  4. ↑ Wolfgang Ballwieser u. a. (Ed.): Handbook IFRS 2011 . 7th edition. Weinheim 2011
  5. ^ GDR loan - over the wall . In: Der Spiegel . No. 22 , 1962, pp. 21st f . ( online ).
  6. ^ The GDR's request for a trade credit from 1962 . Federal Agency for Civic Education , July 25, 2012
  7. ↑ Monika Kaiser: Documents on Germany Policy: Series 6 . Volume 3, 2005, p. 549
  8. ↑ Spiegel.de One day, billions injection for the wall builder