Indirect Investments: FCS (Fully Consolidated System), USM (US Method), or 50 Percent Ownership. Background Paper to Issue No. 3

摘要

During the discussion of the different methods for defining direct investment relationships, the representative from the United States offered to explore the feasibility of comparing selected data on U.S. direct investment abroad using three different methods: the method now used by the U.S. Bureau of Economic Analysis (the US method, henceforth USM), which is based on a straight mathematical calculation of direct and indirect ownership percentages; the Fully Consolidated System (FCS), which is the method recommended in existing international standards including BPM5 and the OECD Benchmark Definition of Foreign Direct Investment; and a method proposed by the European Union that includes directly owned foreign affiliates, companies that are majority owned by those affiliates, and all other companies below them in a continuous chain of majority ownership (EUM).