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Definition of Living Will
This is a will which specifically expresses the testator's desire not to be kept alive on life support machines, should the occasion arise.
Excess of the purchase price over the fair market value of the net assets acquired under purchase
The excess of the price paid to buy another company over the book value of
Intangible assets of a firm established by the excess of the price paid for the going concern over the value of its assets.
Some insurance companies include this benefit option at no cost to their policy holders. The insurer considers on a case to case basis, the need for insurance funds before death. If the insured can demonstrate a shortened life of less than two years and with some insurers one year, the insurer will consider releasing up to 50% or a maximum of $100,000 of the life insurance coverage held by the insured. Not all insurers offer this benefit for free. The need has resulted in specific stand alone living benefit/critical illness policies coming into existence. Look under "Different types of Life Insurance" for further information. You might have heard of "Viatical Settlements", the practice of seriously ill people selling the rights to their life insurance policies to third parties. This practice is common in the United States but has not caught on in Canada.
A term used to describe a situation in which a business combination
This is a legal document detailing how you want your assets to be distributed upon your death. You may also stipulate how you wish to be buried or who you would like to take care of any surviving dependent family members. In my opinion, it is very important to be quite specific about your wishes for the distribution of special assets such as the antique grandfather clock, the classic silver tea set or the antique piano. If you think that your beneficiaries may dispute how your things are to be distributed, consider stipulating that an auction be held in which all beneficiaries may bid on the item which they value and all moneys collected are then shared in the same manner in which you distributed your other liquid assets. Your might want to remember that a will is automatically revoked upon marriage unless the will specifically states that the will is made in contemplation of marriage.
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.
The sum of all the interest options in your policy, including interest.
A collection of systems and processes used to record, report and interpret business transactions.
A broad, all-inclusive term that refers to the methods and procedures
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
An alteration in the accounting methodology or estimates used in
Earnings of a firm as reported on its income statement.
A business for which a separate set of accounting records is being
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The formula assets = Liabilities + Equity.
An equation that reflects the two-sided nature of a
Unintentional mistakes in financial statements. Accounted for by restating
The change in the value of a firm's foreign currency denominated accounts due to a
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
Intentional misstatements or omissions of amounts or disclosures in
The ease and quickness with which assets can be converted to cash.
The period of time for which financial statements are produced – see also financial year.
The principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements.
Accounting rate of return (ARR)
A method of investment appraisal that measures
accounting rate of return (ARR)
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how
accounts receivable turnover ratio
A ratio computed by dividing annual
The recording of revenue when earned and expenses when
Well, frankly, accrual is not a good descriptive
A method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred.
An amount of money invested plus the interest earned on that money.
Acquisition of assets
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
Additional paid-in capital
Amounts 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 capital
Any payment received from investors for stock that exceeds
additional paid-in capital
Difference between issue price and par value of stock. Also called capital surplus.
Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity
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.
A forceful and intentional choice and application of accounting principles
Aggressive Cost Capitalization
cost capitalization that stretches the flexibility within generally
Total costs, explicit and implicit.
An arrangement whereby a security issue is canceled if the underwriter is unable
cost of a security adjusted for the amortization of any purchase premium or
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
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
Arm's length price
The price at which a willing buyer and a willing unrelated seller would freely agree to
A dealer's price to sell a security; also called the offer price.
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 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
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
markets in which the prevailing price is determined through the free interaction of
Average accounting return
The average project earnings after taxes and depreciation divided by the average
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
Gives the lessee the option to purchase the asset at a price below fair market
price expressed in terms of yield to maturity or annual rate of return.
A cost that is incurred when a group of products or services are produced,
a cost that is caused by a group of things
Any market in which prices are in a declining trend.
A market in which stock or bond prices are generally
A prolonged period of falling stock market prices.
The amount of cash payable on a benefit.
This is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically
An illegal market.
Large and creditworthy company.
With respect to convertible bonds, the value the security would have if it were not convertible
A banker or trader's positions.
cash A firm's cash balance as reported in its financial statements. Also called ledger cash.
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the
Pretax income reported on the income statement.
The amount of money invested in inventory, as per a company’s
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
book rate of return
accounting income divided by book value.
book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
The managing underwriter for a new issue. The book runner maintains the book of securities sold.
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
An asset’s cost basis minus accumulated depreciation.
The value of an asset as carried on the balance sheet of a
An asset’s original cost, less any depreciation that has been subsequently incurred.
net worth of the firm’s assets or liabilities according
book value and book value per share
Generally speaking, these terms
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