The Exchange Rate Mechanism (ERM) is a system introduced by the European Economic Community in March 1979 to reduce exchange rate variability and achieve monetary stability in Europe in preparation for Economic and Monetary Union and the introduction of a single currency, the euro.
Exchange-Traded Funds (ETFs) are investment funds traded on stock exchanges, allowing for flexibility and real-time trading. They offer advantages over traditional mutual funds by being priced throughout the trading day.
An exchange-traded note (ETN) is a debt instrument that tracks the performance of a specific index and promises to repay the principal adjusted by applicable fees and index performance. Unlike exchange-traded funds (ETFs), ETNs are backed by the issuer.
A duty or tax levied on certain goods consumed within a country, such as alcoholic drinks and tobacco products, unlike customs duty which is levied on imports.
An excise tax is a tax imposed on specific goods, services, activities, or privileges, often included in the price of the product.
Excite is an internet search engine and web portal that offers a variety of services including search capabilities, an email service, instant messaging, stock quotes, and more.
In both insurance and taxation, exclusion rules determine what items or amounts are not covered by policies or not included in gross income, respectively.
This concept outlines the specific circumstances under which a subsidiary may be excluded from consolidation in a parent company's financial statements under the Financial Reporting Standard Applicable in the UK and Republic of Ireland. This ensures the financial statements provide a true and fair view.
In economics, the Exclusion Principle refers to the right of an owner of private property to exclude others from using or enjoying it.
A provision in an insurance policy that indicates what is denied coverage, commonly including hazards deemed catastrophic in nature, wear and tear, property covered by other insurance, liability arising out of contracts, and liability arising out of workers' compensation laws.
An exclusive agency listing is a contract in real estate giving only one broker, for a specific time, the right to sell a property. It also allows the owner to sell the property independently without paying a commission.
A strategic marketing approach in which a manufacturer grants a select few intermediaries the exclusive right to distribute its products within specific geographic areas.
An exclusive right to sell listing is a contract granting a broker the right to collect a commission if a property is sold by anyone, including the owner, during the term of the agreement.
Exculpatory pertains to evidence or statements that justify or excuse a defendant from alleged fault or guilt. It can also refer to clauses in financial and legal documents that release a party from liability.
The term 'execute' can have multiple meanings depending on the context, including legal, procedural, and computational applications.
Fully accomplished or performed actions, where nothing is left unfulfilled. This is the opposite of executory, where something remains to be completed.
An executed contract is one where all terms and conditions have been met and fulfilled by the parties involved, indicating the conclusion of the contractual obligations.
Execution refers to the formal process of signing, sealing, and delivering a contract or agreement to render it legally valid. In the context of securities, execution pertains to the act of carrying out a trade or order by a broker.
An executive is an employee in a top-level management position with major decision-making authority in an organization. Executives are often given incentive pay, such as bonuses, in the private sector.
An executive committee is a senior-level management committee empowered to make and implement major organizational decisions, oversee organizational activities, request justifications for certain matters, and plan activities.
An executive director is a member of a company's board of directors who has management responsibilities for the day-to-day activities of the business. Compared to non-executive directors, executive directors take an active role in running the company's operations.
An Executive Information System (EIS) is a specialized decision support system tailored to assist senior executives in decision-making processes by providing easy access to both internal and external information relevant to the strategic goals of the organization.
Executive Information Systems (EIS) are specialized, online strategic management systems that utilize central databases to fulfill organizational information analysis requirements, assisting in strategic decision-making processes.
A tax law introduced in 1993 that prohibits a publicly held corporation from taking a deduction for compensation paid to an executive in excess of $1 million per year, unless the compensation is linked to productivity.
Executive perquisites, often referred to as 'perks,' are special benefits or privileges provided by a company to its senior executives. These perks are usually not available to lower-level employees and can include a wide range of amenities, such as company cars, private jet access, and significant bonuses.
An executive search firm, also known as a headhunter, is a specialized recruitment service that seeks out and hires top-level management and executive talent for companies across various industries.
An individual acting as an administrative and secretarial assistant to top-level management personnel in an organization. Executive secretaries have substantial clerical as well as administrative responsibilities.
An approved share option scheme that entitles a specified class of directors or employees to purchase shares in the company in which they are employed.
An executor is a person appointed in a will to administer the estate of a deceased person, ensuring that assets are distributed and liabilities are paid as per the instructions in the will.
An Executor (male) or Executrix (female) is a person designated to carry out the wishes expressed in a Will regarding the administration of an Estate and the distribution of the assets.
An executory contract is an agreement that has not been fully accomplished or completed, but remains contingent upon the occurrence of some future event or performance of some future act.
An exempt organization is a type of entity that is exempt from federal income tax under the Internal Revenue Code (IRC) based on its purpose and organizational structure. These organizations are commonly known as nonprofits or not-for-profits.
Stocks and bonds that are exempt from certain Securities and Exchange Commission (SEC) and Federal Reserve Board (FRB) rules. Examples include government and municipal bonds, which are exempt from SEC registration requirements and FRB margin rules.
Exempt status refers to a special designation that frees certain organizations, such as churches, government organizations, and community chests, from paying taxes. However, these organizations must submit an application for exempt status and file information returns even when no tax is due.
Exempt supplies refer to categories of goods or services that are not subject to Value Added Tax (VAT) as stipulated under the Value Added Tax Act 1994.
Exempt transfers are specific types of gifts or transfers that result in no liability to inheritance tax due to their special exemptions under tax law.
An exemption is a deduction allowed to a taxpayer based on their status or circumstances, reducing the amount of income subject to taxation. Exemptions can apply in various contexts including personal income tax, homestead exemptions, and the alternative minimum tax.
Exemption Phase-Out refers to the gradual reduction in the amount that can be claimed as a deduction for personal exemptions as Adjusted Gross Income (AGI) rises above a specified threshold.
Under specific regulations such as the Companies Act and applicable financial reporting standards in the UK and the Republic of Ireland, certain parent companies may be exempt from preparing consolidated financial statements.
The process of making use of a right available in a contract; commonly used in context with options and convertible securities.
The exercise price, also known as the strike price or striking price, is the predetermined price per share at which an option holder can buy (in the case of a call option) or sell (in the case of a put option) the underlying security.
Existing Use Value (EUV) refers to the price at which a property can be sold on the open market, assuming that it can only be used for its current use and that it is vacant.
An exit charge is the tax imposed under inheritance tax regulations when an asset is removed from a discretionary trust.
An exit fee, also known as a back-end load, is a fee charged when an investor sells or withdraws from an investment, typically within a specific period.
An exit interview is conducted with an employee who is leaving an organization to obtain feedback about their experience and gain insights for organizational improvement.
The net realizable value of an asset, representing its market price at the balance sheet date, less the selling expenses.
An increase in the sales capabilities of a company, often necessary to meet new competitive demands or to open new markets. Expansion can also be the result of high profits, which provide the capital base for increasing the size of the business.
The theory of motivation developed by Victor H. Vroom, which posits that an individual's performance is influenced by the expectation that it will lead to the achievement of a desired goal. Motivation is a combination of effort, the perceived achievability of goals, and desire.
Views of the future that inform consumer, investor, business, and government decisions. Various factors can affect expectations and thereby impact the value of financial assets and business entities.
The Expectations Gap, often referred to as the audit expectations gap, highlights the divergence between what the public perceives auditors are responsible for and what auditors actually are responsible for within the scope of their engagements.
Expected Actual Capacity refers to the forecasted production or service output that a company anticipates under normal conditions, taking into account scheduled downtime, maintenance, and other operational factors.
The extent of non-compliance with recognized control procedures that an auditor expects to find when performing compliance tests on a population or a sample of it.
The extent of the errors that an auditor expects to find when performing substantive tests on a population or a sample of it.
Expected Monetary Value (EMV) is a statistical technique in risk management used to quantify the potential outcomes of various scenarios based on their probabilities and respective monetary values.
EMV is a critical concept in decision-making, particularly when using decision trees. It involves predicting future monetary outcomes and their likelihood to guide strategic choices.
Expected return is a key concept in finance that estimates the likely return on an investment, based on historical data or anticipated performance. This measure helps investors evaluate the potential profitability of various investment options and make informed decisions.
Expected Value (EV) is a fundamental concept in probability and statistics used in decision making, which represents the average outcome when accounting for all possible scenarios, weighted by their respective probabilities.
Expenditure refers to the costs or expenses incurred by an organization. These may be capital expenditure or revenue expenditure. It encompasses both the outlay of money and the acknowledgment of liabilities.
An expenditure code is a unique identifier used in accounting to categorize and record expenses based on their nature and function within an organization, allowing for efficient budgeting and financial reporting.
Expenditure variance measures the difference between actual spending and budgeted spending. This metric can help businesses understand financial discrepancies, control costs, and improve budgeting processes.
An expense is a business cost incurred in operating and maintaining property, used in profit-directed business activities and calculated as the cost of goods and services used. Expenses can be currently deductible costs, distinct from capital expenditures that must be depreciated or amortized over the property's useful life.
An expense account is crucial for recording the costs incurred by an organization, documenting specific expenditure headings before transferring totals to the profit and loss account. It can also refer to the allocated funds certain staff members can use for necessary expenditures.
An Expense Budget outlines the estimated costs that are expected to be incurred by an organization or individual over a specified future period. It serves as a financial plan, helping to allocate resources efficiently and set spending limits to achieve financial goals.
The expense ratio is a financial metric that measures the ratio of operating expenses to gross income for real estate properties or the percentage of total investment paid by shareholders for mutual fund operating expenses and management fees.
A comprehensive document detailing the expenses incurred by a salesperson or executive, including categories such as transportation, lodging, meals, and client entertainment, typically submitted for employer reimbursement.
The Experience Curve is a production phenomenon where unit costs decline as volume increases. This concept highlights the cost advantages gained from efficiency improvements, skill enhancements, process optimizations, and material cost reductions associated with increased production.
Experience rating is an underwriting method used by insurance companies to determine the correct premium price for a policy by analyzing past loss experience within the insured group to project future claims.
An experience refund is the return of a percentage of the premium paid by a business firm if its loss record is better than the amount loaded into the basic premium.
Understanding Expert Power and its role in influencing decisions and actions due to specific knowledge, experience, or expertise.
A computer application used to solve problems within a specific area of knowledge by storing, organizing, and retrieving extensive amounts of information and making decisions similar to those of a human expert in the field.
An expert witness is an individual possessing specialized knowledge, skills, or expertise in a particular field who is called upon to testify in a court of law. Their testimony typically pertains to facts relevant to the case rather than legal interpretations.
Expiration refers to the date on which a contract, agreement, license, magazine subscription, or similar arrangement ceases to be effective. In the context of financial options, it is the last day on which an option can be exercised.
An expiration notice is a written notice provided to an insured individual indicating the date on which their insurance policy will terminate.
Exploitation refers to the act of taking unfair advantage of individuals or situations to benefit oneself. This term is often associated with a negative connotation, implying unethical or immoral behavior.
Exponential smoothing is a widely used technique for short-run forecasting by business forecasters. It utilizes a weighted average of past data as the basis for a forecast, giving heavier weight to more recent information and smaller weights to older observations, reflecting the idea that the future is more influenced by the recent past than distant past.
Exporting is the process of shipping goods produced in one country for sale in another and the transfer of data from one computer or application to another. This term has significant relevance in international trade and data handling.
The Export Credits Guarantee Department (ECGD), now operating under the name 'UK Export Finance,' is a UK government department that promotes exports by providing credit insurance and guaranteeing financer repayment for long-term credit terms.
The Export-Import Bank (EXIM Bank) is an independent U.S. government agency that facilitates international trade by offering financial assistance, including loans, guarantees, and insurance to U.S. exporters and their foreign buyers. Its goal is to support American jobs by leveling the global playing field for U.S. goods and services and mitigating the risks associated with international trade.
The Export-Import Bank of the United States (EXIM) is a government agency established by Congress in 1934 to encourage U.S. trade with foreign countries through various financing programs and risk mitigation services.
Exposure refers to the level of risk assumed by an individual or entity, measured by the amount that one can potentially lose in finance. In marketing, it describes the extent and frequency of advertisements reaching the target audience across various media channels.
A draft document issued for public comment and discussion before the final release of a financial reporting standard by a regulatory or standard-setting body like the Financial Reporting Council.
The term 'express' has multiple applications across different fields such as law and transportation. It typically denotes clarity, specificity, or speed.
Express authority refers to the clear and unequivocal powers granted to an agent by a principal, either orally or in writing, allowing the agent to act on behalf of the principal in specific matters.
An express contract is a legally binding agreement, the terms of which are clearly stated either orally or in writing. It is distinguished from an implied contract where the terms are inferred from conduct or circumstances.
Express Mail is a next-day delivery service offered by the U.S. Postal Service (USPS) that guarantees next-day delivery for shipments between major U.S. cities. This service is applicable for letters or packages weighing up to 70 pounds. Postage costs vary based on weight, distance, and the specific type of Express Mail service used.
Expropriation refers to the government seizure of foreign-owned assets. Under international law, this action is considered legal if just compensation is provided to the owner.
An addition to the standard fire insurance policy that expands the scope of coverage to include additional perils such as riot, civil commotion, smoke, and more.
An extended trial balance provides a detailed verification of the balances extracted from the ledger by adding columns for adjustments, accruals, and prepayments, ultimately clarifying entries for the profit and loss account and balance sheet.
An extendible bond is a type of bond whose maturity date can be extended at the option of all the involved parties. This flexibility can benefit both issuers and investors under certain market conditions.
XBRL is a global standard language for communicating business and financial data. It leverages XML to allow business facts to be identified and analyzed by computers, mandated by the US Securities and Exchange Commission (SEC) for reporting since 2010.
An extension refers to an agreement between two parties to extend the time period specified in a contract. In the context of taxation, an extension provides an additional period of time to file an income tax return.
An additional period during which a tax return may be filed without penalty. An automatic six-month extension of time to file an individual tax return (Form 1040) is obtained by filing Form 4868 by April 15.
Extenuating circumstances refer to unusual conditions that prevent a policy or project from being carried out correctly on time, often beyond the control of the individual or organization. These might include natural disasters, strikes, or unforeseen personal emergencies.
An external audit is a review of the financial statements or operations of a company conducted by an independent auditor. It serves as a key measure for shareholders to ensure the accuracy and reliability of financial information.
Comparing two types of changes that impact production systems—changes stemming from internal market dynamics and those arising from external factors such as consumer preferences and technological innovations.
External diseconomies refer to the adverse effects on third parties outside a transaction, which are not reflected in supply and demand, leading to inefficient resource allocation.
External documents refer to the documents needed for company recordkeeping that have been handled by external individuals or entities, such as vendor invoices and canceled checks. Auditors regard these documents as more reliable than internal documents due to their increased independence and verifiability.
External economies refer to the benefits that spill over to third parties not directly involved in an economic transaction or activity. These benefits are not compensated by the entities receiving them, offering no direct economic incentive to the producer.
External Failure Costs are all costs associated with defects found after a product or service is delivered to the customer. These costs are crucial for understanding a company's approach to quality management and customer satisfaction.
External funds are financial resources that a company secures from outside its organization to support its operations, typically through means like bank loans, bond offerings, or venture capital infusions.
