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Definition of Attribution Rules
Legislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you.
This is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs.
IRS rules used to allocate income on export sales to a foreign sales corporation.
The decomposition of a money manager's performance results to explain
SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors
Argument about whether policy authorities should be allowed to undertake discretionary policy action as they see fit or should be replaced by robots programmed to set policy by following specific formulas. See discretionary policy, policy rule.
An alternative model to the capital asset pricing model developed by
Yield curve option-pricing models.
A model for determining the required rate of return on an asset.
A model, such as the Capital Asset pricing Model (CAPM), that determines the required
An option pricing model in which the underlying asset can take on only two
A model for pricing call options based on arbitrage arguments that uses
An economic theory that describes the relationship between risk and
Cash flow plus change in present value.
Also called a busted convertible, a convertible security that is trading like a straight
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
The market for trading bonds and preferred stock.
Garmen-Kohlhagen option pricing model
A widely used model for pricing foreign currency options.
One who receives income from a trust.
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
A mutual fund providing for liberal current income from investments.
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
Common stock with a high dividend yield and few profitable investment opportunities.
The revenue from a portfolio of invested assets.
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
Also called external efficiency, a market characteristic where prices at all times fully
Regulatory pricing risk
Risk that arises when regulators restrict the premium rates that insurance companies
Also called margin income, the difference between income and cost. For a depository
Gross income less a set of deductions.
Two-state option pricing model
An option pricing model in which the underlying asset can take on only two
Issue of securities below their market value.
For an insurance company, the difference between the premiums earned and the costs
Yield curve option-pricing models
Models that can incorporate different volatility assumptions along the
What was spent to run the non-sales and non-manufacturing part of a company, such as office salaries and interest paid on loans.
An accounting statement that summarizes information about a company in the following format:
What the business paid to the IRS.
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
RATIO OF NET INCOME TO NET SALES
A ratio that shows how much net income (profit) a company made on each dollar of net sales. Here’s the formula:
RATIO OF NET SALES TO NET INCOME
A ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way:
A method of pricing in which a mark-up is added to the total product/service cost.
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
Target rate of return pricing
A method of pricing that estimates the desired return on investment to be achieved from the
income that a company receives in the form of dividends on stock in other companies that it holds.
One of the basic financial statements; it lists the revenue and expense accounts of the company.
income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.
The last line of the income Statement; it represents the amount that the company earned during a specified period.
earnings before interest and income tax (EBIT)
A measure of profit that
Financial statement that summarizes sales revenue
net income (also called the bottom line, earnings, net earnings, and net
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
an organizational unit that performs management activities benefiting the entire organization;
dual pricing arrangement
a transfer pricing system that allows
the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center
current compensation that is taxed at a future date
current compensation that is never taxed
A security that pays a specified cash flow over a
Net earnings after all expenses for an accounting period are subtracted from all
A financial report that summarizes a company’s revenue, cost of
A government tax on the income earned by an individual or corporation.
The excess of revenues over expenses, including the impact of income taxes.
The net income of a business, less the impact of any financial activity,
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
common-size income statement
income statement that presents items as a percentage of revenues.
Financial statement that shows the revenues, expenses, and net income of a firm over a period of time.
Also called economic value added. Profit minus cost of capital employed.
Issuing securities at an offering price set below the true value of the security.
income less income tax.
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
GDP with some adjustments to remove items that do not make it into anyone's hands as income, such as indirect taxes and depreciation. Loosely speaking, it is interpreted as being equal to GDP.
National Income and Product Accounts
The national accounting system that records economic activity such as GDP and related measures.
Permanent Income Hypothesis
Theory that individuals base current consumption spending on their perceived long-run average income rather than their current income.
income expressed in base-year dollars, calculated by dividing nominal income by a price index.
Tax-Related Incomes Policy (TIP)
Tax incentives for labor and business to induce them to conform to wage/price guidelines.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
Adjusted Income from Continuing
Operations Reported income from continuing operations
Pretax income reported on the income statement.
Cash Flow–to–Income Ratio (CFI)
Adjusted cash flow provided by continuing operations
Current Income Tax Expense
That portion of the total income tax provision that is based on
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Income from Continuing Operations
After-tax net income before discontinued operations,
A form of earnings management designed to remove peaks and valleys
Income Tax Expense
See income tax provision.
Income Tax Provision
The expense deduction from pretax book income reported on the
A measure of results produced by the core operations of a firm. It is common
income subject to income tax as reported on the tax return.
income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment.
Life Income Fund
Commonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80.
Registered Retirement Income Fund (Canada)
Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.
A financial statement that displays a breakdown of total sales and total expenses.
Earned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits.
Mutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares.
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