A compound instrument is a financial instrument that contains both an equity element and a debt element. These are complex financial instruments which require careful handling in financial reporting.
Compound interest refers to the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. It is a crucial concept in finance and investing, offering greater returns compared to simple interest.
A compound journal entry is an accounting entry that affects more than one account, allowing for multiple debits and/or credits in a single transaction. It is commonly used for complex transactions in double-entry bookkeeping.
The Comprehensive Annual Financial Report (CAFR) is the official annual report of a government entity, encompassing a wide array of financial statements and disclosures.
The Comprehensive Annual Financial Report (CAFR) is the official annual report of a government entity in the United States. It provides detailed financial statements and analysis of a government's financial health.
Comprehensive auditing is a thorough review process that encompasses evaluation of an organization's operations, compliance, and financial performance to ensure accuracy, efficiency, and adherence to laws and regulations.
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is a federal law designed to clean up sites contaminated with hazardous substances and to impose liability for cleanup on responsible parties.
Federal law, known as Superfund, enacted in 1980 and reauthorized by the Superfund Amendments and Reauthorization Act (SARA) in 1986. The law imposes strict joint and several liability for cleaning up environmentally contaminated land.
Comprehensive General Liability (CGL) insurance provides coverage against all liability exposures of a business unless specifically excluded. This includes coverage for products, completed operations, premises and operations, elevators, and independent contractors.
Comprehensive health insurance provides extensive coverage for hospital and physician charges, incorporating elements of both basic medical expense and major medical policies, subject to deductibles and coinsurance.
Comprehensive income is the total of an entity's operating profits and holding gains recorded during a particular accounting period, encompassing both realized and unrealized gains.
A Comprehensive Income Statement is a financial document that reports a company's total earnings, including those not realized in the income statement, such as unrealized gains and losses, allowing for a more inclusive picture of financial performance.
Comprehensive insurance coverage in automobile insurance provides protection from physical damage (other than collision) and theft of the insured vehicle, covering events like fire damage, vandalism, and natural disasters.
Comprehensive Liability Insurance provides businesses with coverage for negligence-based civil liability in various situations, including bodily injury, property damage, and medical expenses arising from the operation of premises, completed operations, and products.
Comprehensive Personal Liability Insurance offers protection against personal liability claims arising from personal acts and omissions by the insured and residents of the insured's household. This coverage includes a range of activities, from sports and pet-related incidents to unique occurrences like someone tripping in the insured's cemetery plot.
A comprehensive plan is a set of guidelines developed and adopted by a local government to govern public policy toward future land development within the jurisdiction.
A negotiation strategy wherein parties agree to make mutual concessions to reach a consensus or settlement. In management and labor relations, compromise entails both parties yielding some demands to obtain mutually acceptable terms.
A comptroller is a high-level executive who oversees the accounting and financial reporting functions within an organization, often in a governmental or nonprofit entity. The cabinet-level position is usually responsible for ensuring adherence to financial regulations and the accuracy of reported financial data.
A federal official appointed by the President and confirmed by the Senate, responsible for chartering, examining, supervising, and liquidating all national banks.
Compulsory arbitration involves the forceful submission of a labor dispute to a neutral third party, such as a government body or the American Arbitration Association, for resolution. This method, also known as binding arbitration, has been resisted by labor unions and employers who prefer collective bargaining and economic pressure to resolve disputes.
A compulsory checkoff is a mandatory deduction from an employee's wages by the employer, commonly related to union dues or other agreed-upon charges.
Compulsory insurance refers to insurance coverage mandated by law. It requires individuals or businesses to possess a minimum amount of insurance to cover specific risks and liabilities, ensuring financial protection and compliance with regulatory standards.
Compulsory liquidation, also known as compulsory winding-up, is the process of liquidating a company by a court order. This detailed guide covers its definition, examples, frequently asked questions, related terms, and further reading suggestions.
Compulsory retirement, also known as mandatory retirement, refers to being forced to resign from one's employment at an age specified by union contract or company policy. This practice has evolved significantly with changing laws and regulations.
A computer is a machine capable of executing instructions to perform operations on data. Its distinguishing feature is its ability to store its own instructions, allowing it to perform numerous operations without needing new instructions each time. Modern computers are composed of high-speed electronic components capable of executing millions of operations per second.
Computer conferencing allows participants at different locations to exchange information and discuss problem solutions using computers or terminals, providing flexibility to engage in discussions anytime.
Computer Integrated Manufacturing (CIM) is an integrated computerized system combining all elements of Computer-Assisted Design (CAD) and Computer-Aided Manufacturing (CAM) to ensure efficient product development and manufacturing through real-time coordination.
A computer network is a set of computers connected together for the purpose of sharing resources. Networks are commonly categorized based on their scale, including Local Area Network (LAN), Wide Area Network (WAN), and others.
A computer screen is a display device that allows users to interact with their computer system by viewing visual output.
The practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks, unauthorized access, damage, or theft.
Computer-Aided Design (CAD) is the use of computer technology for design and design documentation. CAD software replaces manual drafting with an automated process.
Computer-Aided Instruction (CAI) refers to a form of teaching where a computer system replaces or supplements a live instructor, allowing learners to proceed at their own individual pace.
Techniques developed by auditors for performing compliance tests and substantive tests on computer systems for firms in which the data being audited is processed by computers and held on computer files.
A computer-assisted method of developing three-dimensional designs, crucial for the engineering and architectural professions, allowing designs to be tested under simulated real-time conditions without building physical models.
Computer-Assisted Mass Appraisal (CAMA) refers to proprietary software used to make fast valuations of one or more real properties. This software ranges from simple tools that apply a fixed percentage increase to property values, to highly sophisticated systems that utilize complex statistical techniques to compare and consider other properties.
Automatic transcription of machine shorthand notes into a computer from words recorded in electronic form.
Computerized Loan Origination (CLO) refers to the process of initiating a mortgage loan using specialized computer software that connects the originator with one or more mortgage lenders. This system allows real estate brokers to offer a wider range of services.
A con artist, also known as a con man, is a practitioner of fraud or theft by deception who first wins the confidence of a victim. Con artists usually play on the victim's desire to get something for nothing.
Concealment refers to the intentional withholding or secreting of information. In the context of insurance, if the insured withholds information on a material fact about which the insurance company has no knowledge, the company has grounds to void the contract.
Concentration banking is a financial management strategy aimed at accelerating cash collections from customers by utilizing a network of regional banks, from which funds are transferred to a central main concentration account.
A concentration ratio measures the proportion of total industry sales controlled by the largest firms within the industry, typically the top four or eight firms.
A concept test is a type of research study whose main goal is to evaluate an idea or concept developed to determine its potential success. It aims to assess the effectiveness of an advertising campaign in reaching its intended objectives.
A statement of theoretical principles that provides guidance for financial accounting and reporting. It serves as a foundation for setting accounting standards and provides a coherent system of interrelated objectives and fundamentals.
A document setting out the basic accounting concepts informing International Accounting Standards and International Financial Reporting Standards, serving as a guide in the preparation and presentation of financial statements.
Conceptual skills refer to the ability to understand the interrelationship of ideas or elements in relation to the totality. These skills are crucial for strategic thinking, problem-solving, and decision-making in various fields such as management, business, and education.
In management and business contexts, 'concern' refers to matters requiring attention, issues in labor relations, or business organizations.
The term 'concession' can refer to various business arrangements, such as small shops in lobbies, government-granted rights, rent reductions, or compensation in corporate underwriting.
A Concession Agreement is a contract between a host government's government and a foreign firm that outlines the terms under which the firm will invest in the host country, covering aspects like taxes, profit remittance, and ownership transfer.
Conciliation is a process used in labor disputes where a neutral third party attempts to bring together management and labor to discuss and resolve their differences. The goal is to reconcile the disputing parties through facilitated discussion and negotiation.
A person who attempts to bring management and labor together to resolve disputes and foster mutually beneficial outcomes.
Condemnation is the legal process by which a government or private entity with governmental powers takes private property for public use, with compensation to the owner. This is commonly associated with eminent domain.
The process by which private property is taken for public use with compensation to the owner, under eminent domain, and declarations of structures being unfit for use.
A Condemnation Award refers to the monetary compensation or value of other property received by an entity or individual for property that has been condemned by a government authority for public use, or from the sale of property under threat of condemnation.
In various fields such as law, real estate, and general business, the term 'condition' has multiple meanings. It can refer to a prerequisite or requirement, a potential future event that influences legal obligations or real estate interests, and the physical quality or wear of something.
A condition precedent is an express or implied provision of a contract that requires the occurrence of a specific event or the performance of a certain act before the contract becomes binding on the parties.
A condition subsequent is a provision in a contract that describes an event or act, upon the happening of which certain obligations under the contract terminate.
A contract whose performance is contingent upon the occurrence of a specified future event.
A conditional sale is a sales agreement where the sale is dependent on the fulfillment of a particular condition, typically the full payment of the purchase price. The buyer gains possession and the right to use the goods, but the transfer of title is postponed until the condition is met.
A conditional-use permit (CUP) allows property owners to use their land in a way that is not typically permitted within a particular zoning district, under certain conditions laid out by local zoning authorities.
Conditions, Covenants, and Restrictions (CCRs) refer to the rules and regulations set forth in condominium or subdivision deeds or bylaws that dictate how properties can be used. These regulations ensure aesthetic and functional uniformity, preventing changes that could negatively impact the community.
A form of real estate ownership where individual residents hold a deed and title to their houses or apartments and share maintenance costs for common areas managed by a dedicated company.
The process of changing the ownership structure of a building from a single owner to multiple owners, each owning individual units, typically through a legal and regulatory framework.
A Condominium Declaration, also known simply as a "Declaration," is a legal document that formally establishes the existence of a condominium. It describes the property in detail, outlines the rules and restrictions governing the condominium units, and defines the rights and responsibilities of the unit owners and the condominium association.
An organization of all unit owners in a condominium responsible for overseeing common elements and enforcing the condominium's bylaws.
The conduit approach allows income or deductions to flow through to another entity, such as a partnership or trust, enabling tax liabilities to be managed at the beneficiary or partner level.
An accountancy organization in the Asia-Pacific region, CAPA aims to develop and coordinate the accountancy profession across 31 member organizations in 24 countries, ensuring high-quality services in the public interest.
The Confederation of British Industry (CBI) is a UK-based organization with a mission to represent and advocate for business interests at the national and international level. It engages in policy development and lobbying to influence regulations and promote economic growth.
CBI is an organization that lobbies for British business interests, primarily focusing on influencing UK government policies, the European Union, and other international bodies to foster a favorable business environment.
A conference call is a telephone call that allows multiple lines to be connected simultaneously, enabling three or more participants to communicate in real-time. It is also known as a three-way call or multi-party call.
A confidence game is a scheme by which a swindler, commonly referred to as a con artist, wins the confidence of their victim and then cheats them out of their money by exploiting the trust placed in them.
A confidence interval is a range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter. The interval has an associated confidence level that quantifies the level of confidence that the parameter lies within the interval.
The confidence level, often denoted as the confidence coefficient, is the probability that a range of numbers calculated from a sample of a population includes the value of the population parameter being estimated.
Private or secret information treated with trust, providing a feeling of security that the information will not be disclosed to unauthorized parties.
Configuration refers to the process of setting up a computer system or application to be used in a particular way. It involves selecting and arranging options or settings in order to achieve desired functionality, performance, and usability.
A technique used by an auditor to obtain third-party evidence in support of information supplied by a client. For example, confirmation may be sought from a bank of balances held by a client.
A document confirming the main facts and figures of a deal between two parties, usually a deal that has been agreed verbally or by telephone.
A written or oral request by the auditor of a party having financial dealings with the client about the accuracy of an item. A response is required whether the particular item is correct or incorrect.
A confirmed irrevocable letter of credit adds an additional layer of security for the beneficiary by employing a second bank's confirmation, ensuring payment even if the initial issuing bank fails.
A confirming house is an organization that acts as an intermediary between local exporters and overseas buyers. It pays for goods in the exporters' currency, negotiates prices, arranges shipment and insurance, and provides vital information for the overseas buyers.
Confiscation risk refers to the potential threat that assets held in a foreign country could be seized, expropriated, or nationalized by the host country's government. This risk also includes the possibility of interference with a non-resident owner's control over these assets.
A conflict of interest arises when an individual, such as a public official, faces a clash between their personal interests and their professional responsibilities. This situation can compromise their impartiality and decision-making capabilities.
A conformed copy is a reproduction or exact copy of an original document where essential legal features like signatures and seals are typed or indicated in writing.
A residential mortgage loan eligible for purchase by FNMA (Fannie Mae) or FHLMC (Freddie Mac). These loans typically offer lower interest rates and more favorable terms compared to nonconforming mortgage loans.
A conglomerate is a large corporation formed by the merger or acquisition of smaller companies, each operating in distinct, often unrelated, industries. This structure is typically chosen to diversify risk and achieve financial stability across various market sectors.
The Congress of Industrial Organizations (CIO) was a federation of unions that organized workers in industrial unions in the United States and Canada from 1935 to 1955.
A connected person refers to individuals or entities that are related to a director under the Companies Act, with implications for disclosure requirements.
A consent letter is a formal document included in a prospectus where an expert, such as a reporting accountant, consents to the issuance of the prospectus and acknowledges the inclusion of their report or any reference made to them.
A consent order or decree is an agreement by a defendant to cease activities deemed illegal by the government. This agreement, subject to court approval, bypasses definitive judicial determination but is binding.
Consequential damages, in the context of property law, refer to the loss in value of a property caused by the taking of a nearby property or development on another property.
Conservatism in accounting focuses on understating assets and revenues and overstating liabilities and expenses to provide a prudent and less risky portrayal of a company's financial position. In business, it refers to a cautious and careful attitude, typically avoiding excessive risk. In politics, conservatism promotes limited government spending and lower taxes.
A conservator is a court-appointed custodian of assets belonging to someone determined by the courts to be unable to manage his or her own property.
Consideration is a fundamental element in a contract representing the exchange of promises or monetary value essential to legal agreements.
A consignee refers to an individual or organization authorized to receive goods sent from a consignor. The consignee acts as the recipient of goods, typically in a shipping context, and may also serve as an agent to sell the goods on behalf of the consignor.
Consignment involves the shipment of goods by a principal (consignor) to an agent (consignee) for sale. The consignee sells the goods on behalf of the consignor, often earning a commission upon sale. The process typically involves creating a detailed consignment account.
A consignment note is a key document used in shipping to provide details about a consignment of goods in transit. It is signed by the consignee upon delivery, serving as proof of receipt. The document includes information about the consignor and consignee, details about the goods, and typically their gross weight, as well as outlining who is responsible for insuring the goods during transit.
Consignment Stock refers to products owned by one party but held and managed by another party with the right to sell or return the goods. This ownership arrangement requires careful accounting practices to reflect commercial realities accurately in financial statements.
A consignor is any person or organization that sends goods to a consignee or a principal who sells goods on consignment through an agent, usually in a foreign country.
Consistency refers to the use of the same accounting procedures by an accounting entity from period to period. Consistently applying similar measurement concepts and procedures for related items within the company's financial statements across different periods simplifies comparisons and projections.
Originally one of the four fundamental accounting concepts, the consistency concept mandates uniform treatment of like items within and across accounting periods, ensuring consistent application of accounting policies.
A console is a device, such as a control panel, that allows users to communicate directly with a computer. It provides an interface for human interaction with a computing system.
