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Financial Terms | |
Cumulative Effect of Accounting Change |
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Definition of Cumulative Effect of Accounting ChangeCumulative Effect of Accounting ChangeThe change in earnings of previous years assuming
Related Terms:Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years AccountingA collection of systems and processes used to record, report and interpret business transactions. accountingA broad, all-inclusive term that refers to the methods and procedures Accounting and Auditing Enforcement Release (AAER)Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws. Accounting changeAn alteration in the accounting methodology or estimates used in Accounting earningsEarnings of a firm as reported on its income statement. Accounting entityA business for which a separate set of accounting records is being ![]() Accounting equationThe representation of the double-entry system of accounting such that assets are equal to liabilities plus capital. Accounting equationThe formula Assets = Liabilities + Equity. accounting equationAn equation that reflects the two-sided nature of a Accounting ErrorsUnintentional mistakes in financial statements. Accounted for by restating Accounting exposureThe change in the value of a firm's foreign currency denominated accounts due to a Accounting insolvencyTotal liabilities exceed total assets. A firm with a negative net worth is insolvent on Accounting IrregularitiesIntentional misstatements or omissions of amounts or disclosures in Accounting liquidityThe ease and quickness with which assets can be converted to cash. Accounting periodThe period of time for which financial statements are produced – see also financial year. ![]() Accounting PoliciesThe principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements. Accounting rate of return (ARR)A method of investment appraisal that measures accounting rate of return (ARR)the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow Accounting systemA set of accounts that summarize the transactions of a business that have been recorded on source documents. Accrual accountingThe recording of revenue when earned and expenses when accrual-basis accountingWell, frankly, accrual is not a good descriptive Accruals accountingA method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred. Aggressive AccountingA forceful and intentional choice and application of accounting principles American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades Antidilutive effectResult of a transaction that increases earnings per common share (e.g. by decreasing the Average accounting returnThe average project earnings after taxes and depreciation divided by the average Bill of exchangeGeneral term for a document demanding payment. 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 Calendar effectThe tendency of stocks to perform differently at different times, including such anomalies as 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. Cash accountingA method of accounting in which profit is calculated as the difference between income Change in Accounting EstimateA change in accounting that occurs as the result of new information Change in Accounting EstimateA change in the implementation of an existing accounting Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures Change in Reporting EntityA change in the scope of the entities included in a set of, typically, consolidated financial statements. Changes in Financial PositionSources of funds internally provided from operations that alter a company's Chicago Mercantile Exchange (CME)A not-for-profit corporation owned by its members. Its primary 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 Commodities Exchange Center (CEC)The location of five New York futures exchanges: Commodity Constant dollar accountingA method for restating financial statements by reducing or Contract AccountingMethod of accounting for sales or service agreements where completion Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the cost accountinga discipline that focuses on techniques or Cost Accounting Standards Board (CASB)a body established by Congress in 1970 to promulgate cost accounting Creative Accounting PracticesAny and all steps used to play the financial numbers game, including Creative Acquisition AccountingThe allocation to expense of a greater portion of the price 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-Effect AdjustmentThe cumulative, after-tax, prior-year effect of a change in accounting 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 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. Dilutive effectResult of a transaction that decreases earnings per common share. double-entry accountingSee accrual-basis accounting. Effective annual interest rateAn annual measure of the time value of money that fully reflects the effects of effective annual interest rateInterest rate that is annualized using compound interest. Effective annual yieldAnnualized interest rate on a security computed using compound interest techniques. Effective Annual YieldAnnualized rate of return on a security computed using compound 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 Exchange RateThe weighted average of several exchange rates, where the weights are determined by the extent of our trade done with each country. Effective Interest RateThe rate of interest actually earned on an investment. It is 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 Effective Tax RateThe total tax provision divided by pretax book income from continuing effectivenessa measure of how well an organization’s goals Electronic data interchange (EDI)The exchange of information electronically, directly from one firm's electronic data interchange (EDI)the computer-to-computer transfer of information in virtual real time using standardized formats developed by the American National Standards Institute Embodied Technical ChangeTechnical change that can be used only when new capital embodying this technical change is produced. Engineering changeA change to a product’s specifications as issued by the engineering engineering change order (ECO)a business mandate that changes the way in which a product is manufactured or a Equation of ExchangeThe quantity theory equation Mv = PQ. ExchangeThe marketplace in which shares, options and futures on stocks, bonds, commodities and indices Exchange controlsGovernmental restrictions on the purchase of foreign currencies by domestic citizens or Exchange of assetsAcquisition of another company by purchase of its assets in exchange for cash or stock. Exchange of stockAcquisition of another company by purchase of its stock in exchange for cash or shares. Exchange offerAn offer by the firm to give one security, such as a bond or preferred stock, in exchange for Exchange rateThe price of one country's currency expressed in another country's currency. exchange rateAmount of one currency needed to purchase one unit of another. Exchange Rate Mechanism (ERM)The methodology by which members of the EMS maintain their Exchange Rate, NominalThe price of one currency in terms of another, in this book defined as number of units of foreign currency per dollar. Exchange Rate, RealThe nominal exchange rate corrected for price level differences. Exchange rate riskAlso called currency risk, the risk of an investment's value changing because of currency Exchange riskThe variability of a firm's value that results from unexpected exchange rate changes or the Exchangeable SecuritySecurity that grants the security holder the right to exchange the security for the expectations theory of exchange ratesTheory that expected spot exchange rate equals the forward rate. Financial accountingThe production of financial statements, primarily for those interested parties who are external to the business. financial accountinga discipline in which historical, monetary Fisher effectA theory that nominal interest rates in two or more countries should be equal to the required real Fixed-exchange rateA country's decision to tie the value of its currency to another country's currency, gold Fixed Exchange RateAn exchange rate held constant by a government promise to buy or sell dollars at the fixed rate on the foreign exchange market. Flexible Exchange RateAn exchange rate whose value is determined by the forces of supply and demand on the foreign exchange market. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |