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Definition of Leasehold improvements
The cost of improvements made to property that the company leases.
The cost of improvements to land owned by the company, such as fencing and outdoor lighting.
This is any upgrade to leased property by a lessee that will be
an ongoing process of enhancing employee task performance, level of product quality, and level of company service through eliminating nonvalue-added activities to reduce lead time, making products
The cost of land owned by the company.
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
a cost accumulation and reporting
A methodology under which all manufacturing costs are assigned
Schedule of depreciation rates allowed for tax purposes.
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
The period of time for which financial statements are produced – see also financial year.
The ratio of net credit sales to average accounts receivable, a measure of how
A ratio computed by dividing annual
A merger or consolidation in which an acquirer purchases the selling firm's assets.
A 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
The actual expenditure made to acquire an asset, which includes the supplierinvoiced
actual cost system
a valuation method that uses actual direct
Agency cost view
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
Aggressive Capitalization Policies
Capitalizing and reporting as assets significant portions of
Aggressive Cost Capitalization
cost capitalization that stretches the flexibility within generally
Total costs, explicit and implicit.
All or none
Requirement that none of an order be executed unless all of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
cost of a security adjusted for the amortization of any purchase premium or
Annualized holding period return
The annual rate of return that when compounded t times, would have
The time between each payment under an annuity.
the amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for This amount are to an overhead account
a quality control cost incurred for monitoring
any possession that has value in an exchange.
A resource, recorded through a transaction, that is expected to yield a benefit to a
Something that is owned; a financial claim or a piece of property that is a store of value.
Probable future economic benefit that is obtained or controlled by an entity as a result of
anything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.).
All things of value owned by an individual or organization.
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Bond or note secured by assets of company.
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
Categories of assets, such as stocks, bonds, real estate and foreign securities.
Extent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The ratio of total assets to stockholder equity.
Asset for asset swap
Creditors exchange the debt of one defaulting borrower for the debt of another
Also called surplus management, the task of managing funds of a financial
The weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments.
Asset pricing model
A model for determining the required rate of return on an asset.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
The amount of total risk that can be eliminated by diversification by
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
asset turnover ratio
A broad-gauge ratio computed by dividing annual
A firm's productive resources.
anything of value that a company owns.
Things that the business owns.
Items owned by the company or expenses that have been paid for but have not been used up.
A common element of a financial plan that describes projected capital spending and the
An option is at-the-money if the strike price of the option is equal to the market price of the
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
Average Amortization Period
The average useful life of a company's collective amortizable asset base.
Average Collection Period
Average number of days necessary to receive cash for the sale of
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
Average-Cost Inventory Method
The inventory cost-flow assumption that assigns the average
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
Also referred to as the weighted-average life (WAL). The average number of years that each
costs that are identifiable with and able to be influenced by decisions made at the business
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
Money owed to the bank in a cheque account where payments exceed receipts.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The reference year when constructing a price index. By tradition it is given the value 100.
A cost that is incurred when a group of products or services are produced,
a cost that is caused by a group of things
Large and creditworthy company.
Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between
a planned expenditure
Buy limit order
A conditional trading order that indicates a security may be purchased only at the designated
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
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.
an asset used to generate revenues or cost savings
A fixed asset, something that is expected to have long-term usage within
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
Capital Cost Allowance (CCA)
The annual depreciation expense allowed by the Canadian Income Tax Act.
A lease obligation that has to be capitalized on the balance sheet.
A lease in which the lessee obtains some ownership rights over the asset
one where substantially all of the benefits and risks of ownership are transferred to the lessee. It must be reflected on the company's balance sheet as an asset and corresponding liability.
Refers to recouping, or regaining, invested capital over
capital structure, or capitalization
Terms that refer to the combination of
The debt and/or equity mix that fund a firm's assets.
The total amount of debt and equity issued by a company.
A method of constructing a replicating portfolio in which the manager purchases a
capitalization of costs
When a cost is recorded originally as an increase
A discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate.
Also called financial leverage ratios, these ratios compare debt to total capitalization
A table showing the capitalization of a firm, which typically includes the amount of
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