The Balance Sheet for Expatriates
Why would you use the Balance Sheet Approach?
The main reason the Balance Sheet is used is because it conveys economic neutrality to the employee. The company can offer the employee the peace of mind that they will not lose out financially on an expatriate assignment.
While it is the best way to protect the employee, the Balance Sheet is often an expensive option for the company due to the cost of the balancing payments and the related administration involved in supporting the approach. As such, the Balance Sheet is often reserved for critical skill or executive level employees where the company receives significant value from an expatriate assignment.