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Financial Terms | |
Indemnity |
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Definition of IndemnityIndemnityA type of contract in which the amount of the benefit to be paid is based on the actual amount of financial loss determined at the time of the loss - for example, hospital expense insurance.
Related Terms:Accidental Death Benefit (ADB)Coverage against accidental death usually payable in addition to base amount of coverage. Accidental Dismemberment: (Credit Insurance)Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident. Accrued expenses payableexpenses 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. accrued expenses payableThe account that records the short-term, noninterest- Accumulated Benefit Obligation (ABO)An approximate measure of the liability of a plan in the event of a Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and ![]() Activity-based costingA method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers. activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns activity-based management (ABM)a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received Actual costThe actual expenditure made to acquire an asset, which includes the supplierinvoiced actual cost systema valuation method that uses actual direct ActualsThe physical commodity underlying a futures contract. Cash commodity, physical. Additional paid-in capitalamounts in excess of the par value or stated value that have been paid by the public to acquire stock in the company; synonymous with capital in excess of par. ![]() Additional paid-in capitalAny payment received from investors for stock that exceeds additional paid-in capitalDifference between issue price and par value of stock. Also called capital surplus. Amortization (Credit Insurance)Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity. Annual fund operating expensesFor investment companies, the management fee and "other expenses," Asset-based financingMethods of financing in which lenders and equity investors look principally to the Asset-Based FinancingLoans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender. attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute Automatic Benefits PaymentAutomatic payment of moneys derived from a benefit. Base probability of lossThe probability of not achieving a portfolio expected return. Beneficiary (Credit Insurance)The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor. BenefitAn instruction that pays a cash amount upon the occurrence of a specific event. Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit ValueThe amount of cash payable on a benefit. Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off benefits-provided rankinga listing of service departments in an order that begins with the one providing the most service Borrower (Credit Insurance)A consumer who borrows money from a lender. Break-even timeRelated: Premium payback period. Bullet contractA guaranteed investment contract purchased with a single (one-shot) premium. Related: cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Canadian Life and Health Insurance Association (CLHIA)An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada. Capital lossThe difference between the net cost of a security and the net sale price, if that security is sold at a loss. capital lossThe negative 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 less than you paid, you incur a capital loss. Cash flow time-lineLine depicting the operating activities and cash flows for a firm over a particular period. Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Changes in Financial PositionSources of funds internally provided from operations that alter a company's chief financial officer (CFO)Officer who oversees the treasurer and controller and sets overall financial strategy. Child Insurance Rider (CIR)insurance or insurability provided on current or future children of insured. Co-insuranceIn medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced. Coinsurance effectRefers to the fact that the merger of two firms decreases the probability of default on Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Completed-Contract MethodA contract accounting method that recognizes contract revenue Conditional sales contractsSimilar to equipment trust certificates except that the lender is either the continuous lossany reduction in units that occurs uniformly ContractA term of reference describing a unit of trading for a financial or commodity future. Also, the actual ContractA formal written statement of the rights and obligations of each party to a transaction. Contract AccountingMethod of accounting for sales or service agreements where completion contract manufactureran external party that has been granted an outsourcing contract to produce a part or component for an entity Contract monthThe month in which futures contracts may be satisfied by making or accepting a delivery. contract vendoran external party that has been granted an Contract Work Hours and Safety Standards ActA federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week. Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningfinancial planning conducted by a firm that encompasses preparation of both Cost-Benefit AnalysisThe calculation and comparison of the costs and benefits of a policy or project. cost-benefit analysis the analytical process of comparing therelative costs and benefits that result from a specific course Cost-benefit ratioThe net present value of an investment divided by the investment's initial cost. Also called Cost of InsuranceThe cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual. cost-plus contracta contract in which the customer agrees costs of financial distressCosts arising from bankruptcy or distorted business decisions before bankruptcy. Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Credit LossA loan receivable that has proven uncollectible and is written off. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. Critical Illness InsuranceCoverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. There are no restrictions on how you use your benefit. Critical Illness Insurance (Credit Insurance)Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing. Current Income Tax ExpenseThat portion of the total income tax provision that is based on cycle timethe time between the placement of an order to Dead Peasants InsuranceAlso known as "Dead Janitors insurance", this is the practice, where allowed, in several U.S. states, of numerous well known large American Corporations taking out corporate owned life insurance policies on millions of their regular employees, often without the knowledge or consent of those employees. Corporations profiting from the deaths of their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate death benefits are seldom, even partially passed down to surviving families. Death Benefitamount paid on death of an insured. Debt (Credit Insurance)Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured. Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result Defined benefit planA pension plan in which the sponsor agrees to make specified dollar payments to Defined Benefit PlanA pension plan that pays out a predetermined dollar Depreciation expenseAn expense account that represents the portion of the cost of an asset that is being charged to expense during the current period. Disability Insuranceinsurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period. Disability Insurance (Credit Insurance)Group insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. discrete lossa reduction in units that occurs at a specific Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms employee time sheeta source document that indicates, for each employee, what jobs were worked on during the day and for what amount of time Equity-based insuranceLife insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio. Equivalent annual benefitThe equivalent annual annuity for the net present value of an investment project. Errors and Omissions Insuranceinsurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker. ExpenseThe reduction in value of an asset as it is used for current company operations. Expense ratioThe percentage of the assets that were spent to run a mutual fund (as of the last annual ExpensedCharged to an expense account, fully reducing reported profit of that year, as is appropriate for ExpensesThe costs incurred in buying, making or producing goods and services. ExpensesCosts involved in running the company. Export Credit InsuranceThe granting of insurance to cover the commercial and political risks of selling in foreign markets. External Financial StatementsCorporate financial statements that have been reported on by an external independent accountant. 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 Federal Deposit Insurance Corporation (FDIC)A federal institution that insures bank deposits. Federal Insurance Contributions Act of 1935 (FICA)A federal Act authorizing the government to collect Social Security and Medicare payroll taxes. Financial accountingThe production of financial statements, primarily for those interested parties who are external to the business. financial accountinga discipline in which historical, monetary Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |