A Vietnam EMS Partner is Not Off the OEM Books
A Vietnam EMS provider on the purchase order does not move the 10-K.
China+1 often shows up as a new legal entity. The EMS manufacturer, or the OEM equipment manufacturer, forms a Vietnam company, opens a local bank account, files local Vietnam accounts, and puts a general manager in place who can sign a purchase order. Sourcing awards that company and treats the 10-K as done.
If the OEM owns that company, or controls it, U.S. GAAP and IFRS still bring the P&L, balance sheet, and cash flow into the OEM. Issuing a purchase order to a Vietnam company does not take inventory, tooling, people, or cash off the consolidated statements. Manufacturing leaves those statements if the OEM buys from a company it does not control. Ask finance if the OEM will consolidate that company before the award memo says manufacturing is off the OEM balance sheet.
Full article at ventureoutsource.com: Vietnam EMS company and the OEM balance sheet