Net debt payment specifically includes bilateral net debt payment and multilateral net debt payment.
1. Bilateral net debt payment refers to the method of regular payment of net debt between two operating units of a multinational company system.
2. Multilateral net debt payment refers to the method of regularly paying net debt between three or more operating units.
Here is an example to illustrate the net payment of multilateral debt.
Assume that during the net payment period of a multinational company, ** Subsidiary owes ** subsidiary the equivalent of US$5 million in pounds sterling, and ** subsidiary owes The Italian subsidiary owes Italian lira equivalent to US$3 million, and the Italian subsidiary owes the ** subsidiary French francs equivalent to US$3 million. After the creditor's rights and debts between the three subsidiaries are offset, only ** is required. The settlement can be settled by the subsidiary paying a certain pre-agreed monetary fund equivalent to US$2 million to the ** subsidiary. During this period, the total flow of funds was $11 million, the net flow of funds was $2 million, and the offsetting fund flows were $9 million.
The above is the simple understanding of "net debt payment" by the editor of Legal Savior. I hope it will be helpful to you.
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