|FASB No. 8|
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Definition of FASB No. 8
FASB No. 8
U.S. accounting standard that requires U.S. firms to translate their foreign affiliates' accounts by
A collection of systems and processes used to record, report and interpret business transactions.
A broad, all-inclusive term that refers to the methods and procedures
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
An alteration in the accounting methodology or estimates used in
Earnings of a firm as reported on its income statement.
A business for which a separate set of accounting records is being
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The formula Assets = Liabilities + Equity.
An equation that reflects the two-sided nature of a
Unintentional mistakes in financial statements. Accounted for by restating
The change in the value of a firm's foreign currency denominated accounts due to a
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
Intentional misstatements or omissions of amounts or disclosures in
The ease and quickness with which assets can be converted to cash.
The period of time for which financial statements are produced – see also financial year.
The 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
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
‘Buckets’ within the ledger, part of the accounting system. Each account contains similar transactions (line items) that are used for the production of financial statements. Or commonly used as an abbreviation for financial statements.
Money owed to suppliers.
Amounts a company owes to creditors.
Amounts owed by the company for goods and services that have been received, but have not yet been paid for. Usually accounts payable involves the receipt of an invoice from the company providing the services or goods.
Short-term, non-interest-bearing liabilities of a business
Acurrent liability on the balance sheet, representing short-term obligations
Amounts due to vendors for purchases on open account, that is, not evidenced
Accounts Payable Days (A/P Days)
The number of days it would take to pay the ending balance
Money owed by customers.
Amounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts.
Amounts owed to the company, generally for sales that it has made.
Short-term, non-interest-bearing debts owed to a
A current asset on the balance sheet, representing short-term
Amounts due from customers for sales on open account, not evidenced
Money owed to a business for merchandise or services sold on open account.
Accounts Receivable Days (A/R Days)
The number of days it would take to collect the ending
Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how
accounts receivable turnover ratio
A ratio computed by dividing annual
The recording of revenue when earned and expenses when
Well, frankly, accrual is not a good descriptive
A method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred.
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.
Accumulated Other Comprehensive Income
Cumulative Gains or losses reported in shareholders'
Adjusted Income from Continuing
Operations reported income from continuing operations
A forceful and intentional choice and application of accounting principles
a process of service department cost allocation
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
Allowance for Doubtful Accounts
An estimate of the uncollectible portion of accounts receivable
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
Result of a transaction that increases earnings per common share (e.g. by decreasing the
Asian currency units (ACUs)
Dollar deposits held in Singapore or other Asian centers.
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average age of accounts receivable
The weighted-average age of all of the firm's outstanding invoices.
Average-Cost Inventory Method
The inventory cost-flow assumption that assigns the average
Balance of Payments Accounts
A statement of a country's transactions with other countries.
Benefit Ratio Method
The proportion of unemployment benefits paid to a company’s
Benefit Wage Ratio Method
The proportion of total taxable wages for laid off
A currency that is not freely convertible to other currencies due to exchange controls.
Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees
A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
Pretax income reported on the income statement.
Bootstrapping, bootstrap method
An arithmetic method for backing an
The tendency of stocks to perform differently at different times, including such anomalies as
Capital gains yield
The price change portion of a stock's return.
A method of constructing a replicating portfolio in which the manager purchases a
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
A method of accounting in which profit is calculated as the difference between income
Cash Flow–to–Income Ratio (CFI)
Adjusted cash flow provided by continuing operations
Change in Accounting Estimate
A change in accounting that occurs as the result of new information
Change in Accounting Estimate
A change in the implementation of an existing accounting
Change in Accounting Principle
A change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures
Chart of accounts
A listing of all accounts used in the general ledger, usually sorted in
The grouping of investors who have a preference that the firm follow a particular financing
Refers to the fact that the merger of two firms decreases the probability of default on
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s Performance Presentation standards Implementation
common-size income statement
income statement that presents items as a percentage of revenues.
A contract accounting method that recognizes contract revenue
see simultaneous engineering
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
Constant dollar accounting
A method for restating financial statements by reducing or
method of accounting for sales or service agreements where completion
Contract Work Hours and Safety Standards Act
A federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.
Controlled foreign corporation (CFC)
A foreign corporation whose voting stock is more than 50% owned
a discipline that focuses on techniques or
Cost Accounting Standards Board (CASB)
a body established by Congress in 1970 to promulgate cost accounting
Creative Accounting Practices
Any and all steps used to play the financial numbers game, including
Creative Acquisition Accounting
The allocation to expense of a greater portion of the price
The cumulative, after-tax, prior-year effect of a change in accounting
Cumulative Effect of a Change in Accounting Principle
The change in earnings of previous years
Cumulative Effect of Accounting Change
The change in earnings of previous years assuming
Taking advantage of divergences in exchange rates in different money markets by
The value of a portfolio of specific amounts of individual currencies, used as the basis for
A financial future contract for the delivery of a specified foreign currency.
An option to buy or sell a foreign currency.
Related: Exchange rate risk
Currency risk sharing
An agreement by the parties to a transaction to share the currency risk associated with
Asset allocation in which the investor chooses among investments denominated in
An agreement to swap a series of specified payment obligations denominated in one currency
Net flow of goods, services, and unilateral transactions (gifts) between countries.
That part of the balance of payments accounts that records demands for and supplies of a currency arising from activities that affect current income, namely imports, exports, investment income payments such as interest and dividends, and transfers such as gifts, pensions, and foreign aid.
Typically the cash, accounts receivable, and inventory accounts on the
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