|Deferred Income Tax Expense|
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Definition of Deferred Income Tax Expense
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
expenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services.
The account that records the short-term, noninterest-
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.
Cumulative gains or losses reported in shareholders'
Operations Reported income from continuing operations
The ratio of net income to net sales.
Money after-tax rate of return minus the inflation rate.
For investment companies, the management fee and "other expenses,"
A situation wherein participants in a transaction have different net tax rates.
taxes as a fraction of income; total taxes divided by total taxable income.
Total taxes owed divided by total income.
The ratio of net income before taxes to net sales.
Pretax income reported on the income statement.
The tax rate at which a party to a prospective transaction is indifferent between entering
Net income plus depreciation.
Cash Flow–to–Income Ratio (CFI)
Adjusted cash flow provided by continuing operations
common-size income statement
income statement that presents items as a percentage of revenues.
Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
Current Income Tax Expense
That portion of the total income tax provision that is based on
Current Tax Payment Act of 1943
A federal Act requiring employers to withhold income taxes from employee pay.
tax-advantaged life insurance product. deferred annuities offer deferral of taxes with the
An annuity providing for income payments to commence at a specified future time.
A provision that prohibits the company from calling the bond before a certain date. During this
pay related to current performance
A common term for convertible bonds because of their equity component and the
The most distant months of a futures contract. A bond that sells at a discount and does not
Deferred nominal life annuity
A monthly fixed-dollar payment beginning at retirement age. It is nominal
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
A non-cash expense that provides a source of free cash flow. Amount allocated during the
An expense account that represents the portion of the cost of an asset that is being charged to expense during the current period.
Depreciation tax shield
The value of the tax write-off on depreciation of plant and equipment.
depreciation tax shield
Reduction in taxes attributable to the depreciation allowance.
income less income tax.
income that a company receives in the form of dividends on stock in other companies that it holds.
Agreement between two countries that taxes paid abroad can be offset against
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.
earnings before interest and income tax (EBIT)
A measure of profit that
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
Cash flow plus change in present value.
Effective Tax Rate
The total tax provision divided by pretax book income from continuing
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
The reduction in value of an asset as it is used for current company operations.
The percentage of the assets that were spent to run a mutual fund (as of the last annual
Charged to an expense account, fully reducing reported profit of that year, as is appropriate for
The costs incurred in buying, making or producing goods and services.
Costs involved in running the company.
Federal Unemployment Tax Act (FUTA)
A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a
Cost of doing business which does not change with the volume of business. Examples might be rent for business premises, insurance payments, heat and light.
fixed expenses (costs)
expenses or costs that remain the same in amount,
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.
A security that pays a specified cash flow over a
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
What was spent to run the non-sales and non-manufacturing part of a company, such as office salaries and interest paid on loans.
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
Net earnings after all expenses for an accounting period are subtracted from all
One who receives income from a trust.
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
Income from Continuing Operations
After-tax net income before discontinued operations,
A mutual fund providing for liberal current income from investments.
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.
A form of earnings management designed to remove peaks and valleys
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.
An accounting statement that summarizes information about a company in the following format:
One of the basic financial statements; it lists the revenue and expense accounts of the company.
Financial statement that summarizes sales revenue
A financial report that summarizes a company’s revenue, cost of
Financial statement that shows the revenues, expenses, and net income of a firm over a period of time.
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
A financial statement that displays a breakdown of total sales and total expenses.
Common stock with a high dividend yield and few profitable investment opportunities.
What the business paid to the IRS.
A government tax on the income earned by an individual or corporation.
Income Tax Expense
See income tax provision.
Income Tax Provision
The expense deduction from pretax book income reported on the
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
taxes paid by consumers when they buy goods and services. A sales tax is an example.
The loss in purchasing power due to inflation eroding the real value of financial assets such as cash.
Interest equalization tax
tax on foreign investment by residents of the U.S. which was abolished in 1974.
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.
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
interest tax shield
tax savings resulting from deductibility of interest payments.
The revenue from a portfolio of invested assets.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
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.
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
management expense ratio (MER)
The total expenses expressed as an annualized percentage of daily average net assets. MER does not include brokerage fees and commissions, which are also payable by the Fund.
Margin Tax Rate
The tax rate applicable to the last unit of income.
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