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Financial Terms | |
Gain-on-Sale Accounting |
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Definition of Gain-on-Sale AccountingGain-on-Sale AccountingUp-front gain recognized from the securitization and sale of a pool
Related Terms: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 Annualized gainIf stock X appreciates 1.5% in one month, the annualized gain for that sock over a twelve Available-for-Sale SecurityA debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period. Average accounting returnThe average project earnings after taxes and depreciation divided by the average Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market ![]() Best-efforts saleA method of securities distribution/ underwriting in which the securities firm agrees to sell Capital gainWhen a stock is sold for a profit, it's the difference between the net sales price of securities and Capital gainThe gain recognized on the sale of a capital item (fixed asset), calculated Capital GainAn increase in the value of an asset. capital gainThe positive difference between the adjusted cost base of an investment held as a capital property and the proceeds of disposition you receive when you sell it. When you sell such an investment for more than you paid, you realize a capital gain. Capital gains yieldThe price change portion of a stock's return. Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstfuture-period revenue. 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 Closing saleA transaction in which the seller's intention is to reduce or eliminate a long position in a stock, Conditional SaleA type of agreement to sell whereby a seller retains title to goods sold and delivered to a purchaser until full payment has been made. Conditional Sale AgreementAn agreement entered into between a conditional buyer and a conditional seller setting out the terms under which goods change hands. Conditional sales contractsSimilar to equipment trust certificates except that the lender is either the Constant dollar accountingA method for restating financial statements by reducing or Contingent deferred sales charge (CDSC)The formal name for the load of a back-end load fund. Contract AccountingMethod of accounting for sales or service agreements where completion cost accountinga discipline that focuses on techniques or Cost Accounting Standards Board (CASB)a body established by Congress in 1970 to promulgate cost accounting Cost of salesThe manufacture or purchase price of goods sold in a period or the cost of providing a service. 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 Effect of a Change in Accounting PrincipleThe change in earnings of previous years Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Days' sales outstandingAverage collection period. Domestic International Sales Corporation (DISC)A U.S. corporation that receives a tax incentive for double-entry accountingSee accrual-basis accounting. Extraordinary Gain or Lossgains and losses that are judged to be both unusual and nonrecurring. extraordinary gains and lossesNo pun intended, but these types of gains Financial accountingThe production of financial statements, primarily for those interested parties who are external to the business. financial accountinga discipline in which historical, monetary Foreign Sales Corporation (FSC)A special type of corporation created by the Tax Reform Act of 1984 that Forward saleA method for hedging price risk which involves an agreement between a lender and an investor GainThe profit earned on the sale of an asset, computed by subtracting its book value Generally Accepted Accounting Principals (GAAP)A technical accounting term that encompasses the Generally accepted accounting principlesThe rules that accountants follow when processing accounting transactions and creating financial reports. The rules are primarily generally accepted accounting principles (GAAP)This important term generally accepted accounting principles (GAAP)Procedures for preparing financial statements. Generally Accepted Accounting Principles (GAAP)A common set of standards and procedures Generally Accepted Accounting Principles (GAAP)GAAP is the term used to describe the underlying rules basis on which financial statements are normally prepared. This is codified in the Handbook of The Canadian Institute of Chartered Accountants. Gross salesThe total sales recorded prior to sales discounts and returns. Installment saleThe sale of an asset in exchange for a specified series of payments (the installments). internal accounting controlsRefers to forms used and procedures Limitation on merger, consolidation, or saleA bond covenant that restricts in some way a firm's ability to Limitation on sale-and-leasebackA bond covenant that restricts in some way a firm's ability to enter into Management accountingThe production of financial and non-financial information used in planning for the future; making decisions about products, services, prices and what costs to incur; and ensuring that plans are implemented and achieved. management accountinga discipline that includes almost Management Accounting Guidelines (MAGs)pronouncements of the Society of Management Accountants of Negotiated saleSituation in which the terms of an offering are determined by negotiation between the issuer Net salesTotal revenue, less the cost of sales returns, allowances, and discounts. NET SALES (revenue)The amount sold after customers’ returns, sales discounts, and other allowances are taken away from NUMBER OF DAYS SALES IN RECEIVABLES(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that haven’t been collected yet. Opening saleA transaction in which the seller's intention is to create or increase a short position in a given Paper gain (loss)Unrealized capital gain (loss) on securities held in portfolio, based on a comparison of percentage of sales modelsPlanning model in which sales forecasts are the driving variables and most other variables are point of sale (POS)The terminal at which a customer uses his/her debit card to make a direct payment transaction. See also Interac Direct Payment. Price/sales ratio (PS Ratio)Determined by dividing current stock price by revenue per share (adjusted for stock splits). Purchase accountingMethod of accounting for a merger in which the acquirer is treated as having purchased Purchase and saleA method of securities distribution in which the securities firm purchases the securities RATIO OF NET INCOME TO NET SALESA 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 INCOMEA ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way: Realized Gains and LossesIncreases or decreases in the fair value of an asset or a liability that Regulatory accounting proceduresaccounting principals required by the FHLB that allow S&Ls to elect responsibility accounting systeman accounting information system for successively higher-level managers about the performance of segments or subunits under the control return on salesThis ratio equals net income divided by sales revenue. Sale and lease-backsale of an existing asset to a financial institution that then leases it back to the user. Sale and LeasebackAn agreement in which the owner of a property sells that property to a person or institution and then leases it back again for an agreed period and rental. SalesAmounts earned by the company from the sale of merchandise or services; often used interchangeably with the term revenue. Sales allowanceA reduction in a price that is allowed by the seller, due to a problem Sales chargeThe fee charged by a mutual fund when purchasing shares, usually payable as a commission to Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |