A life estate is an interest in property that lasts for the duration of a person's life, providing certain rights and responsibilities for the life tenant.
Life expectancy refers to the average age a person is expected to live based on actuarial calculations, which consider several factors including sex, heredity, and health habits. This metric is crucial for insurance companies in projecting benefit payouts and determining rates through actuarial analysis.
Life insurance is a policy that pays a death benefit to beneficiaries upon the insured's death in return for premiums.
A Life Insurance Settlement is the sale of an existing life insurance policy to a third party for a lump sum that is greater than the policy's cash surrender value but less than its net death benefit.
A life tenant is an individual who has the right to use and occupy property for the duration of their life or the life of another designated person.
Life-cycle costing is a comprehensive approach to determining the total costs of a fixed asset, accounting for not just acquisition costs but also operational and maintenance expenses over its lifetime.
A lifestyle business is a type of small business established primarily to support the income and personal objectives of the individual entrepreneur, aligning closely with their lifestyle and values rather than aiming for high growth or scalability.
The lifetime exemption pertains to the total amount of gifts and estate transfers one can make without incurring federal gift or estate taxes.
Lifetime gifts are a strategic and effective vehicle for transfer in estate planning. They eliminate all probate and administration expenses on the property transferred, providing financial benefits and simplicity for estate management.
The Lifetime Learning Credit is a tax credit available to students of any age for any type of study, aimed at offsetting education-related expenses. Worth up to $2,000, it can significantly reduce the amount of tax owed by taxpayers who qualify.
Lifetime security refers to a form of employee job security that guarantees protection against layoffs during economic slowdowns or plant closings.
Lifetime Value (LTV) is a metric used to forecast the future profitability a customer will bring to a business over the entire duration of their relationship with the company. It is pivotal in making strategic decisions related to marketing, customer acquisition, and retention.
An overview of the London International Financial Futures and Options Exchange (LIFFE) which provides facilities for trading in options and futures contracts including those on government bonds, share indexes, foreign currencies, and interest rates.
LIFO (Last-In-First-Out) is an inventory valuation method where the most recently produced items are considered sold first.
Lifting the veil of incorporation is an exceptional legal process where the separate legal entity principle of a corporation is disregarded to hold its members or directors personally liable, often applied in cases of wrongful or fraudulent trading.
Lighterage refers to the charge incurred for unloading a ship, specifically using barges to assist in the unloading process.
A like-kind exchange, also known as a tax-free exchange, is a transaction or series of transactions that allow for the deferral of capital gains tax if certain conditions are met.
Like-kind property refers to properties that are of the same nature or character but may differ in grade or quality. In terms of taxation, like-kind properties can be exchanged without triggering immediate tax liabilities, typically under IRS Section 1031.
A limit order is an order to buy or sell a security at a specific price or better. The broker will execute the trade only within the price restriction, ensuring that the desired price or a more favorable one is achieved.
Limit up and limit down are the maximum price movement thresholds allowed for a commodity futures contract during one trading day. These limits are set to prevent excessive volatility and ensure orderly markets.
Limitation of scope refers to restrictions or constraints that may prevent auditors from obtaining sufficient and appropriate evidence to form an audit opinion. This can significantly impact the reliability and comprehensiveness of the audit report.
Refers to the year during which a statute of limitations applies to a specific legal action or claim. It sets the maximum time after an event within which legal proceedings may be initiated.
A limited (special) partner in a limited partnership is a part owner whose liability is restricted to the amount they have invested and typically has limited involvement in the management of the business.
A limited company is a type of company structure where the liability of members is restricted to their investment or guarantee amount.
A Limited Company (Ltd.) is a legal business entity structure characterized by providing limited liability to its shareholders and often being managed by directors. Limited companies are separate legal entities, meaning their assets and liabilities are distinct from those of their shareholders.
Limited distribution involves restricting the availability of a product to specific geographic locations, stores, or areas within a geographic location to target a particular market segment or control brand exclusivity.
Limited liability is a legal principle whereby a company's owners and shareholders are protected from being personally liable for the company's debts and liabilities, limited to the amount of their investment.
A Limited Liability Company (LLC) is an organization form in some states that may be treated as a partnership for federal tax purposes while offering limited liability protection to its owners at the state level. This entity may be subject to state franchise tax as a corporation. Two common forms of these entities are Limited Liability Companies (LLCs) and Limited Liability Partnerships (LLPs), which protect individual partners from the liabilities of other partners.
A Limited Liability Partnership (LLP) combines the benefits of traditional partnerships with limited liability. It provides flexibility in business operation while offering liability protection similar to corporations.
A Limited Occupancy Agreement allows a prospective buyer to take possession of real estate before official closing and transfer of ownership.
A limited partner's liability is restricted to his or her investment in the partnership. Limited partners are often passive investors and do not participate in the day-to-day operations of the business.
A limited partnership is a type of business entity in which at least one partner (the general partner) manages the business and is personally liable for the debts, while other partners (limited partners) contribute capital and have limited liability.
Limited recourse financing is often used in project finance because it provides a security structure that limits the financier's recourse to the project.
A limited warranty is a type of warranty that imposes certain limitations and is, therefore, not a full warranty. For example, an automaker may issue a warranty that covers parts but not labor for a particular period.
A constraint in budgetary control and decision making that prevents an organization from achieving higher levels of performance and profitability.
A term with multiple meanings in business referring either to personnel involved in production or distribution, or the types of goods produced or carried.
Line and staff organization delineates the organizational authority between management personnel (staff) with planning and direction responsibilities and operational personnel (line) with direct job performance responsibilities. The staff functions in an advisory capacity to the line function.
Line authority refers to the power granted to supervisors or managers over their subordinates within an organization. This authority enables direct control over important operations and decision-making processes.
Line Control refers to different mechanisms of control exercised within an organization and telecommunications systems. It can involve organizational control over line functions or control over telecommunications systems.
Line extension refers to the addition of another variety of a product to an already established brand line of products. This strategy helps brands to capitalize on their existing reputation and market base, offering consumers more options while remaining under the trusted umbrella of the original brand.
Line function refers to activities or roles that directly contribute to the primary output of an organization. In service organizations, line functions typically encompass areas like operations and sales.
Administration of the line functions of an organization; management of all activities that contribute directly to an organization's output.
A line of credit is an agreement between a financial institution and a borrower that allows the borrower to access funds up to an approved limit, providing flexibility in borrowing. It is not necessary to reapply each time funds are needed, but repayment is expected as the credit is used.
An organizational structure where direct line functions contribute to the organization's output. This setup ensures clear lines of authority, accountability, and streamlined decision-making, focusing on direct communication from top management to entry-level employees.
A line printer is a high-speed printer used for computer output, capable of printing an entire line of text at once and achieving high speeds suitable for large-scale printing tasks.
A Lineal Foot, also known as a Linear Foot, is a measure of length equivalent to one foot, measured in a straight line along the ground. It is commonly used in construction, real estate, and various fields requiring precise measurement of distance or length of materials. Unlike square feet or cubic feet, a lineal foot is a single dimension length measurement.
A linear cost function captures cost behavior that, when plotted on a graph against activity levels, results in a straight line. This function simplifies the relationship between costs and activity levels, essential for cost estimation and budgeting in business.
Linear depreciation involves writing off a constant amount of an asset's value every year, resulting in a straight-line graph when the depreciation expense is plotted against time.
Linear interpolation is a technique used to estimate an unknown value that falls within two known values in a linear relationship. This method is essential in fields like finance, particularly for calculating the internal rate of return (IRR).
Linear programming is a mathematical technique used for optimization, particularly suited for scenarios involving constraints. This method assists in achieving the best possible outcome, such as maximizing profits or minimizing costs, under specified limitations.
Linear Programming (LP) is a mathematical method for determining a way to achieve the best outcome in a given mathematical model for decisions with numerous alternatives. LP is often used in business, economics, and engineering to maximize profit or minimize costs in processes with varying levels of inputs.
An analytical method used to quantify the relationship between two or more variables by fitting a linear equation to observed data. This method is commonly employed in finance, economics, and various scientific fields to identify trends and make predictions.
The method of presenting an asset in the balance sheet where the asset linked to financing is shown gross, with the financing deducted within a single asset caption.
A social media platform mainly used for professional networking, launched in 2003 and became a public company in 2011. It's an essential platform for making business contacts, finding jobs, and sourcing job candidates.
Linux is a freely distributed, UNIX-compatible operating system originally created for PCs. It has since been adapted to run on various types of processors. The name 'Linux' is a trademark registered to its creator, Linus Torvalds, and is often interpreted as Linus's UNIX.
Liquid assets are assets that can be easily converted into cash without significantly affecting their value. They are essential for maintaining the liquidity of individuals and corporations.
Liquid assets are those holdings that can be quickly and easily converted into cash with minimal capital loss, playing a crucial role in assessing a company's liquidity and solvency.
A liquid instrument refers to a negotiable instrument that the purchaser can sell or trade before its maturity date, offering flexibility and quick access to funds.
A critical measure used to assess a company's short-term liquidity, focusing on the ability to cover current liabilities with liquid assets.
To settle or determine the amount due and extinguish indebtedness. More commonly, liquidate refers to the adjustment or settlement of debts and sometimes paying off obligations.
Liquidated damages are a pre-determined amount agreed upon by the contracting parties as a reasonable estimation of damages owed in the event of a breach of contract.
A liquidated debt is a debt that is undisputed both in terms of its existence and the exact amount owed.
Liquidating value refers to the projected price for an asset of a company that is going out of business, such as a real estate holding or office equipment. This value is often distinguished from the going-concern value, which may be higher due to factors such as organization value or goodwill.
Liquidation, also known as winding-up, refers to the process of distributing a company's assets among its creditors and members, which ultimately leads to the dissolution of the company. The process can be voluntary or court-ordered.
A liquidation dividend is a payment distributed to shareholders during the process of winding up a business, after settling obligations with its debtors and creditors. This distribution represents the remaining assets proportionate to shareholders' equity.
A person appointed to manage the winding-up process of a company, ensuring orderly asset distribution to creditors and members.
Liquidity refers to the extent to which an organization's assets are liquid, enabling it to pay its debts when they fall due and to move into new investment opportunities.
The Liquidity Index measures a company's liquidity by calculating the number of days it would take for current assets to be converted into cash, providing insights into financial stability and operational efficiency.
Liquidity management refers to the combination of day-to-day operations carried out by the financial management of an organization with the objective of optimizing its liquidity so that it can make the best use of its liquid resources.
Liquidity preference is an element of Keynesian economic theory that examines the relative preference of investors to hold money rather than bonds or other investments. It influences the level of economic activity and is related to interest rates and return on investment (ROI).
Liquidity premium refers to the additional return that investors demand for holding assets that can be easily converted into cash with minimal loss of value. This concept indicates the relative advantage of holding liquid assets.
A liquidity ratio is a metric used to determine a company's ability to pay off its short-term liabilities as they come due using its most liquid assets.
Liquidity risk refers to the potential risk that an investment cannot be liquidated during its life without significant costs or losses. This is particularly relevant in lending operations, where the ability to quickly convert an asset to cash is crucial.
A liquidity trap is an economic situation where adding liquidity through increased money supply and lowered interest rates fails to stimulate borrowing, lending, consumption, and investment. It can sometimes be escaped through fiscal policy or distributing money directly to people.
A legal notice indicating that there is a pending lawsuit involving the property or its title, which serves to alert potential buyers or encumbrancers of the legal claim. The term means 'suit pending.'
A list owner refers to the individual or organization that possesses and controls a mailing list, often used for marketing and solicitation purposes. Mailing lists are generally sold on a price per name basis.
In retail, the price regularly quoted to customers before applying discounts. List prices are usually the prices printed on dealer lists, invoices, price tags, catalogs, or dealer purchase orders.
An automated email list distribution system that manages a list of email addresses to facilitate mass emailing.
A listed company is one that has a formal listing agreement with a major stock exchange, ensuring that its shares are publicly quoted and traded on that exchange. In the UK, these companies were once referred to as quoted companies.
A listed option refers to a put or call option that has been authorized for trading on an exchange, also known as an exchange-traded option. These options feature standardized terms and are regulated by a governing body, ensuring fair and transparent trading.
In taxation, listed property refers to assets such as automobiles, computers, and cellular phones that are subject to a 50% business use test. Depreciation methods for these assets vary based on their usage for business purposes.
A listed security refers to a financial instrument that is traded on a recognized stock exchange, meeting specific criteria and adhering to stringent regulatory requirements, thereby providing transparency, liquidity, and marketability.
The act of placing real estate for sale with a broker or entering a security to be traded on a stock exchange.
A listing refers to a written engagement contract between a principal and an agent, authorizing the agent to perform services for the principal involving the latter's property. It is also the record of property for sale by a broker who has been authorized by the owner to sell.
A licensed real estate professional who secures a listing of the property and is responsible for marketing and selling it. They are employed by the seller and contrast with the selling agent, who represents the buyer.
The price a seller puts on a home when it is placed on the market. The listing price, also known as the asking price, is generally considered a starting point for negotiations between the seller and a prospective buyer.
The conditions that must be satisfied before a security can be traded on a stock exchange. To achieve a quotation in the Official List of Securities of the main market of the London Stock Exchange the requirements contained in a listing agreement must be signed by the company seeking quotation.
A litigant is a party actively involved in a lawsuit, either as a plaintiff or a defendant. They actively participate in litigation, seeking to resolve a legal dispute through judicial intervention.
Litigation is a judicial contest through which legal rights are sought to be determined and enforced. It typically involves various stages, including pleadings, discovery, trial, and potentially appeal.
Professional assistance provided by nonlawyers to lawyers during the litigation process, including services by forensic accountants, investigative accounting, auditing, economic and tax determinations, expert testimonies, and financial valuations in dispute situations.
Generally accepted accounting principles tailored to small companies to reduce the compliance burden relative to the informational value provided to the owners.
Living benefits of life insurance refer to advantages and financial support provided to policyholders while they are still alive, ensuring additional financial security during critical life events.
A living trust, also known as an inter vivos trust, is a legal document created and operational during the lifetime of the settlor to manage their assets and streamline the transfer of those assets after their death, thereby avoiding probate.
A legal document that permits an individual to declare his/her desires concerning the use of life-sustaining treatment when death is imminent and the individual no longer has control of his/her faculties.
Lloyd's of London is a unique insurance market composed of various syndicates specializing in particular risks, offering insurance and reinsurance solutions for a wide spectrum of needs.
A Limited Liability Partnership (LLP) is a business structure that combines the benefits of a partnership with those of a corporation. It provides its owners with limited liability protection while still allowing for the pass-through taxation benefits of a partnership.
LME stands for the London Metal Exchange, a key global marketplace for industrial metals trading, offering futures and options contracts for metals such as aluminum, copper, and zinc.
The term 'load' can refer to different concepts in computing and finance. In computing, it involves moving a program from a disk to a computer's memory. In finance, it typically refers to a sales charge paid by an investor when buying shares in a mutual fund.
A load fund is a type of mutual fund that requires investors to pay a sales charge, typically to compensate financial advisors and brokers who sell the fund’s shares.
A loan is a financial transaction where a lender provides property, typically money, to a borrower, who promises to return the property with interest after a specified period.
