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Cumulative-Effect Adjustment |
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Definition of Cumulative-Effect AdjustmentCumulative-Effect AdjustmentThe cumulative, after-tax, prior-year effect of a change in accounting
Related Terms:CARs (cumulative abnormal returns)a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock. Antidilutive effectResult of a transaction that increases earnings per common share (e.g. by decreasing the Calendar effectThe tendency of stocks to perform differently at different times, including such anomalies as Clientele effectThe grouping of investors who have a preference that the firm follow a particular financing Coinsurance effectRefers to the fact that the merger of two firms decreases the probability of default on Cumulative abnormal return (CAR)Sum of the differences between the expected return on a stock and the Cumulative dividend featureA requirement that any missed preferred or preference stock dividends be paid Cumulative preferred stockPreferred stock whose dividends accrue, should the issuer not make timely Cumulative probability distributionA function that shows the probability that the random variable will Cumulative Translation Adjustment (CTA) accountAn entry in a translated balance sheet in which gains Cumulative votingA system of voting for directors of a corporation in which shareholder's total number of Dilutive effectResult of a transaction that decreases earnings per common share. Effective annual interest rateAn annual measure of the time value of money that fully reflects the effects of Effective annual yieldAnnualized interest rate on a security computed using compound interest techniques. Effective call priceThe strike price in an optional redemption provision plus the accrued interest to the Effective convexityThe convexity of a bond calculated with cash flows that change with yields. Effective dateIn an interest rate swap, the date the swap begins accruing interest. Effective durationThe duration calculated using the approximate duration formula for a bond with an Effective margin (EM)Used with SAT performance measures, the amount equaling the net earned spread, or Effective rateA measure of the time value of money that fully reflects the effects of compounding. Effective spreadThe gross underwriting spread adjusted for the impact of the announcement of the common Fisher effectA theory that nominal interest rates in two or more countries should be equal to the required real Information-content effectThe rise in the stock price following the dividend signal. International Fisher effectStates that the interest rate differential between two countries should be an Low price-earnings ratio effectThe tendency of portfolios of stocks with a low price-earnings ratio to Neglected firm effectThe tendency of firms that are neglected by security analysts to outperform firms that Non-cumulative preferred stockPreferred stock whose holders must forgo dividend payments when the P/E effectThat portfolios with low P/E stocks have exhibited higher average risk-adjusted returns than high P/E stocks. Small-firm effectThe tendency of small firms (in terms of total market capitalization) to outperform the Synergistic effectA violation of value-additivity whereby the value of the combination is greater than the Weekend effectThe common recurrent low or negative average return from Friday to Monday in the stock market. Effective Annual YieldAnnualized rate of return on a security computed using compound Effective Interest RateThe rate of interest actually earned on an investment. It is effectivenessa measure of how well an organization’s goals judgmental method (of risk adjustment)an informal method of adjusting for risk that allows the decision maker cumulative votingVoting system in which all the votes one shareholder is allowed to cast can be cast for one candidate for the board of directors. effective annual interest rateInterest rate that is annualized using compound interest. international Fisher effectTheory that real interest rates in all countries should be equal, with differences in nominal rates reflecting differences in expected inflation. Effective Exchange RateThe weighted average of several exchange rates, where the weights are determined by the extent of our trade done with each country. Policy-Ineffectiveness PropositionTheory that anticipated policy has no effect on output. Seasonal Adjustmentadjustment to correct measures for changes that happen for seasonal reasons. Wealth EffectThe effect on spending of a change in wealth caused by a change in the overall price level. Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit CommitteesA committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Effective Tax RateThe total tax provision divided by pretax book income from continuing Panel on Audit EffectivenessA special committee of the Public Oversight Board that was created Inventory adjustmentA transaction used to adjust the book balance of an inventory Accumulated Other Comprehensive Incomecumulative gains or losses reported in shareholders' Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures
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