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Definition of income funds
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.
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.
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
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 beta of a fund is determined as follows:
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
Pretax income reported on the income statement.
Adjusted cash flow provided by continuing operations
income statement that presents items as a percentage of revenues.
Interest rate associated with borrowing money.
That portion of the total income tax provision that is based on
That portion of the total income tax provision that is the result
income less income tax.
income that a company receives in the form of dividends on stock in other companies that it holds.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
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
Cash flow plus change in present value.
EFT (electronic funds transfer)
funds which are electronically credited to your account (e.g. direct deposit), or electronically debited from your account on an ongoing basis (e.g. a pre-authorized monthly bill payment, or a monthly loan or mortgage payment). A wire transfer is a form of EFT.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Investment funds established for the support of institutions such as colleges, private
Non-interest bearing deposits held in reserve for depository institutions at their district Federal
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Federal funds rate
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
Federal Funds Rate
The interest rate at which banks lend deposits at the Federal Reserve to one another overnight.
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
Forward Fed funds
Fed funds traded for future delivery.
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
Mutual funds that seek long-term capital growth. This type of fund invests primarily in equity securities.
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.
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.
Mutual funds that aim to track the performance of a specific stock or bond index. This process is also referred to as indexing and passive management.
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.
internally generated funds
Cash reinvested in the firm; depreciation plus earnings not paid out as dividends.
The revenue from a portfolio of invested assets.
Labour-Sponsored Venture Funds
Venture capital corporations established by labour unions. They function as other venture capital corporations but are subject to government regulation.
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
GDP with some adjustments to remove items that do not make it into anyone's hands as income, such as indirect taxes and depreciation. Loosely speaking, it is interpreted as being equal to GDP.
National Income and Product Accounts
The national accounting system that records economic activity such as GDP and related measures.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
The last line of the income Statement; it represents the amount that the company earned during a specified period.
The excess of revenues over expenses, including the impact of income taxes.
net income (also called the bottom line, earnings, net earnings, and net
NSF (non-sufficient funds)
This appears on your statement if there are insufficient funds in your account to cover a cheque that you have written or a pre-authorized payment that you have already arranged. You will be charged a service fee for non-sufficient funds.
The net income of a business, less the impact of any financial activity,
A measure of results produced by the core operations of a firm. It is common
Permanent Income Hypothesis
Theory that individuals base current consumption spending on their perceived long-run average income rather than their current income.
RATIO OF NET INCOME TO NET SALES
A 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 INCOME
A ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way:
income expressed in base-year dollars, calculated by dividing nominal income by a price index.
Registered Retirement Income Fund (Canada)
Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.
the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center
Also called economic value added. Profit minus cost of capital employed.
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
Mutual funds that seek to preserve capital. This type of fund invests primarily in short-term securities with an average term to maturity of one year or less, or in the case of money market funds, 90 days or less.
The capital invested in a business by the shareholders, including retained profits.
Also called margin income, the difference between income and cost. For a depository
Cash flow available after payment of taxes in the project.
current compensation that is taxed at a future date
current compensation that is never taxed
Tax-Related Incomes Policy (TIP)
Tax incentives for labor and business to induce them to conform to wage/price guidelines.
Gross income less a set of deductions.
income subject to income tax as reported on the tax return.
Term Fed Funds
Fed funds sold for a period of time longer than overnight.
For an insurance company, the difference between the premiums earned and the costs
Insured Retirement Plan
This is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today."
Mutual funds are pools of money that are managed by an investment company. They offer
Registered Pension Plan
Commonly referred to as an RPP this is a tax sheltered employee group plan approved by Federal and Provincial governments allowing employees to have deductions made directly from their wages by their employer with a resulting reduction of income taxes at source. These plans are easy to implement but difficult to dissolve should the group have a change of heart. Employer contributions are usually a percentage of the employee's salary, typically from 3% to 5%, with a maximum of the lessor of 20% or $3,500 per annum. The employee has the same right of contribution. Vesting is generally set at 2 years, which means that the employee has right of ownership of both his/her and his/her employers contributions to the plan after 2 years. It also means that all contributions are locked in after 2 years and cannot be cashed in for use by the employee in a low income year. Should the employee change jobs, these funds can only be transferred to the RPP of a new employer or the funds can be transferred to an individual RRSP (or any number of RRSPs) but in either scenario, the funds are locked in and cannot be accessed until at least age 60. The only choices available to access locked in RPP funds after age 60 are the conversion to a Life income Fund or a Unisex Annuity.
spousal RRSP (Canada)
The RRSP rules allow you to contribute to an RRSP for your spouse and claim the deduction yourself. Your total contribution (to your own and your spouse's plan) is still subject to your normal contribution limits, minus any personal pension adjustment and any past service pension adjustment, plus any unused contribution room from prior years and any pension adjustment reversal. Generally, the advantage is that your spouse will ultimately be the one who reports the income for tax purposes when the funds are withdrawn on retirement or otherwise (certain restrictions apply). If your spouse will have a lower income than you when the funds are withdrawn, significantly lower taxes may be payable on the withdrawn amount.
Historically, damages paid out during settlement of personal physical injury cases were distributed in the form of a lump-sum cash payment to the plaintiff. This windfall was intended to provide for a lifetime of medical and income needs. The claimant or his/her family was then forced into the position of becoming the manager of a large sum of money.
The municipal bond market where state and local governments raise funds. Bonds issued
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