|Imputation tax system|
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Definition of Imputation tax system
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
Schedule of depreciation rates allowed for tax purposes.
The ratio of net income to net sales.
Money after-tax rate of return minus the inflation rate.
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.
The ratio of net income before taxes to net sales.
The tax rate at which a party to a prospective transaction is indifferent between entering
Net income plus depreciation.
A computerized clearing system for sterling funds
An international wire transfer system for high-value
The argument that double (corporate and individual) taxation of equity returns makes
Rate of return required on a par bond to produce the same after-tax yield to
A non-cash expense that provides a source of free cash flow. Amount allocated during the
The value of the tax write-off on depreciation of plant and equipment.
Agreement between two countries that taxes paid abroad can be offset against
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the Federal
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Interest equalization tax
tax on foreign investment by residents of the U.S. which was abolished in 1974.
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Just-in-time inventory systems
systems that schedule materials/inventory to arrive exactly as they are
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
A technical trading strategy that combines mechanical rules, such as the CRISMA
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also
Personal tax view (of capital structure)
The argument that the difference in personal tax rates between
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
Short-term tax exempts
Short-term securities issued by states, municipalities, local housing agencies, and
Split-rate tax system
A tax system that taxes retained earnings at a higher rate than earnings that are
Common to all businesses.
Also called undiversifiable risk or market risk, the minimum level of risk that can be
Systematic risk principle
Only the systematic portion of risk matters in large, well-diversified portfolios.
TANs (tax anticipation notes)
tax anticipation notes issued by states or municipalities to finance current
Tax anticipation bills (TABs)
Special bills that the Treasury occasionally issues that mature on corporate
Set of books kept by a firm's management for the IRS that follows IRS rules. The stockholder's
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
The municipal bond market where state and local governments raise funds. Bonds issued
Tax free acquisition
A merger or consolidation in which 1) the acquirer's tax basis in each asset whose
A nation with a moderate level of taxation and/or liberal tax incentives for undertaking specific
Tax Reform Act of 1986
A 1986 law involving a major overhaul of the U.S. tax code.
The reduction in income taxes that results from taking an allowable deduction from taxable income.
Swapping two similar bonds to receive a tax benefit.
Tax deferral option
The feature of the U.S. Internal Revenue Code that the capital gains tax on an asset is
Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to
The option to sell an asset and claim a loss for tax purposes or not to sell the asset and
A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
Gross income less a set of deductions.
Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.
Two-tier tax system
A method of taxation in which the income going to shareholders is taxed twice.
Also called the diversifiable risk or residual risk. The risk that is unique to a company
Method of indirect taxation whereby a tax is levied at each stage of production on the value
A tax levied by a country of source on income paid, usually on dividends remitted to the
What the business paid to the IRS.
MACRS (Modified Accelerated Cost Recovery System)
A depreciation method created by the IRS under the tax Reform Act of 1986. Companies must use it to depreciate all plant and equipment assets installed after December 31, 1986 (for tax purposes).
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
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.
Planning, programming and budgeting system (PPBS)
A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.
Profit before interest and taxes (PBIT)
Payroll tax expense
The amount of tax associated with salaries that an employer pays to governments (federal, state, and local).
Payroll taxes payable
The amount of payroll taxes owed to the various governments at the end of a period.
Periodic inventory system
An inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period.
Perpetual inventory system
An inventory system in which the balance in the Inventory account is adjusted for the units sold each time a sale is made.
earnings before interest and income tax (EBIT)
A measure of profit that
The amount of total risk that cannot be eliminated by portfolio
The amount of total risk that can be eliminated by diversification by
actual cost system
a valuation method that uses actual direct
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
a system using transfer prices; see transfer
cost control system
a logical structure of formal and/or informal
cost management system (CMS)
a set of formal methods
enterprise resource planning (ERP) system
a packaged software program that allows a company to
flexible manufacturing system (FMS)
a production system in which a single factory manufactures numerous variations
hybrid costing system
a costing system combining characteristics
job order costing system
a system of product costing used
just-in-time manufacturing system
a production system that attempts to acquire components and produce inventory only as needed, to minimize product defects, and to
management control system (MCS)
an information system that helps managers gather information about actual organizational occurrences, make comparisons against plans,
management information system (MIS)
a structure of interrelated elements that collects, organizes, and communicates
normal cost system
a valuation method that uses actual
performance management system
a system reflecting the entire package of decisions regarding performance measurement and evaluation
process costing system
a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products;
a production system dictated by product sales
the traditional production system in which
an inventory ordering system in which a red
responsibility accounting system
an accounting information system for successively higher-level managers about the performance of segments or subunits under the control
standard cost system
a valuation method that uses predetermined
tax benefit (of depreciation)
the amount of depreciation deductible for tax purposes multiplied by the tax rate;
postponing taxation of an amount until a future date
a tax treatment where income is never subject to income taxation
current compensation that is taxed at a future date
current compensation that is never taxed
tax shield (of depreciation)
the amount of depreciation deductible
an inventory ordering system in which two
A government tax on the income earned by an individual or corporation.
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