Financial Terms
Intercompany transaction

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Definition of Intercompany transaction

Intercompany Transaction Image 1

Intercompany transaction

transaction carried out between two units of the same corporation.



Related Terms:

Significant Influence

The extent of influence of an investor over the operating and financial
policies of an investee. Typically implied when an investor has a voting interest of between 20%
and 50% of an investee's voting shares. However, can be implied as a result of such factors as
board representation, participation in management, material intercompany transactions, and technological
dependency.


Cash transaction

A transaction where exchange is immediate, as contrasted to a forward contract, which
calls for future delivery of an asset at an agreed-upon price.


Going-private transactions

Publicly owned stock in a firm is replaced with complete equity ownership by a
private group. The shares are delisted from stock exchanges and can no longer be purchased in the open
markets.


Highly leveraged transaction (HLT)

Bank loan to a highly leveraged firm.


Intercompany loan

Loan made by one unit of a corporation to another unit of the same corporation.



Picking transaction

Withdrawing parts or subassemblies from stock in order to
manufacture subassemblies or finished products.


Realizable Revenue A revenue transaction where assets received in exchange for goods and

services are readily convertible into known amounts of cash or claims to cash.


Intercompany Transaction Image 2

Round-trip transactions costs

Costs of completing a transaction, including commissions, market impact
costs, and taxes.


Structured arbitrage transaction

A self-funding, self-hedged series of transactions that usually utilize
mortgage securities as the primary assets.


Taxable transaction

Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.


Transaction

The financial description of a business event.


Transaction

A business event that has a monetary impact on an entity’s financial statements,
and is recorded as an entry in its accounting records.


Transaction demand (for money)

The need to accommodate a firm's expected cash transactions.


Transaction exposure

Risk to a firm with known future cash flows in a foreign currency that arises from
possible changes in the exchange rate. Related:translation exposure.


Transaction loan

A loan extended by a bank for a specific purpose. In contrast, lines of credit and revolving
credit agreements involve loans that can be used for various purposes.


Transactions costs

The time, effort, and money necessary, including such things as commission fees and the
cost of physically moving the asset from seller to buyer. Related: Round-trip transaction costs, Information
costs, search costs.


Transactions motive

A desire to hold cash for the purpose of conducting cash based transactions.



 

 

 

 

 

 

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