A finance company provides various types of loans, typically at higher interest rates compared to traditional banks, often catering to ventures and individuals considered high risk.
A finance house is an organization, often owned by commercial banks, that provides finance for hire-purchase or leasing agreements. These institutions play a pivotal role in consumer finance, enabling consumers to purchase expensive items through structured agreements while earning profits from the interest rate differential.
A finance lease transfers substantially all the risks and rewards of ownership of an asset to the lessee. In accounting, it is akin to the lessee owning the asset. This entry describes the implications and guidelines involved in finance leases.
A finance vehicle is a specialized financial entity that organizations use to achieve certain fiscal or operational advantages, such as minimizing tax liabilities or securing funding.
Financial accounting is the branch of accounting concerned with classifying, measuring, and recording the transactions of a business, ultimately presenting the performance and financial position of a business through standardized financial statements.
The Financial Accounting Foundation (FAF) in the USA oversees and provides funding for the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB). It appoints members and supervises the standard-setting process to ensure the integrity and reliability of accounting principles.
In the USA, a council that advises the Financial Accounting Standards Board (FASB) on agenda-setting and accounting standards to ensure the relevance and quality of financial reporting.
The Financial Accounting Standards Board (FASB) is an independent organization that establishes and improves standards of financial accounting and reporting for companies and non-profit organizations in the United States.
The Financial Accounting Standards Board (FASB) is an independent board responsible for establishing and interpreting Generally Accepted Accounting Principles (GAAP).
The Financial Accounting Standards Board (FASB) is a private, non-governmental organization established in 1973 to develop and issue standards for financial accounting and reporting. These standards are commonly referred to as Generally Accepted Accounting Principles (GAAP).
The Financial Action Task Force (FATF) is an intergovernmental organization established to develop policies to combat money laundering and terrorist financing.
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Organization for Economic Cooperation and Development (OECD) to combat money laundering and terrorist financing on a global scale through policy development and surveillance.
Financial adaptability refers to the ability of an accounting entity to take effective action to alter the amounts and timing of cash flows so that it can respond to unexpected needs or opportunities.
A niche segment within the advertising industry, focused on the promotion of financial products and services such as mutual fund shares, limited partnership units, and products offered by banks, brokerage firms, and insurance companies.
A professional adviser providing financial counsel in various domains, such as investing, insurance, estate planning, and taxes. Financial advisers can be fee-based, commission-based, or both.
Financial analysis involves evaluating businesses, projects, budgets, and other financial entities to determine their performance and suitability. This analysis is used to gauge a company’s financial health and operational efficiency.
Financial appraisal refers to the use of financial evaluation techniques to determine the preferred option among various alternatives, often employing discounted cash flow methods, ratio analysis, profitability index, or payback period.
A financial asset is either cash, a contractual right to receive cash, the right to exchange a financial instrument with another entity under potentially favourable terms, or an equity instrument of another entity.
Financial assets include stocks, bonds, rights, certificates, bank balances, and other securities, distinguishing themselves from tangible, physical assets like real property.
A financial budget is an organizational tool that outlines an entity's monthly, quarterly, or annual financial goals and expectations, aiding in financial planning, forecasting, and control.
Financial Capital Maintenance is an accounting concept that stipulates a company must generate enough revenue to cover both operational costs and maintain its equity capital intact over a set period.
The Financial Conduct Authority (FCA) is a regulatory body established in April 2013, responsible for overseeing the conduct of financial services firms in the UK. It aims to ensure integrity, protect consumers, and promote competition within financial markets.
Financial control encompasses actions taken by the management of an organization to ensure that costs incurred and revenues generated are at acceptable levels. It involves the provision of financial information to management by accountants and utilizes techniques such as budgetary control and standard costing to highlight and analyze variances.
Financial distress refers to a situation in which the activity of a business is influenced by the possibility of impending insolvency. This state incurs various costs, ranging from those related to bankruptcy to costs arising from stakeholders' changes in behavior and managerial focus.
A financial expense is an outlay of funds recorded in a company's financial records, rather than cost records. Common examples include interest paid on borrowed funds and directors' fees.
Financial feasibility refers to the ability of a proposed land use or change in land use to justify itself from an economic perspective. While it is one test of the highest and best use of land, it does not necessarily make a project the most rewarding use of the land.
Financial futures are futures contracts based on a financial instrument. These contracts generally move inversely with interest rates.
Financial futures refer to standardized futures contracts that involve financial assets such as currencies, interest rates, or other financial instruments. These contracts are exchange-traded and play a vital role in hedging and portfolio management.
Financial gearing, also referred to as leverage, is the degree to which a company utilizes borrowed money or debt to finance its operations and growth.
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization (SRO) and the largest nongovernmental regulator of securities firms in the United States. Created in July 2007 by the consolidation of the National Association of Securities Dealers (NASD) and the member regulation, enforcement, and arbitration functions of the New York Stock Exchange (NYSE).
FINRA is a self-regulatory organization established in 2007 aimed at overseeing brokers and dealers in the United States securities market, providing training, arbitration, and enforcement of a written code of practice to ensure market integrity.
A comprehensive guide to understanding the role, functions, and importance of the Financial Industry Regulatory Authority (FINRA) in maintaining market integrity and protecting investors.
Any organization whose core activity is to provide financial services or advice in relation to financial products. Financial institutions include state bodies, such as central banks, and private companies, such as banks, building societies, and financial markets.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 restructured the regulatory and deposit insurance systems concerning savings and loan associations and introduced reforms to prevent future financial crises.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) was enacted as a comprehensive regulatory response aimed at addressing the crises in the savings and loans industry, implementing reforms, and improving enforcement mechanisms within financial institutions.
A contract involving a financial obligation that represents a monetary asset to one party and a financial liability or equity instrument to another party. Examples include stocks, bonds, loans, and derivatives.
Financial instruments are monetary contracts between parties. They can be created, traded, modified, and settled. They may be cash (currency), a contractual right to deliver or receive cash (as expressed by a bond), or another type of instrument that conveys ownership (equity).
A financial intermediary plays a crucial role in the financial system by facilitating the flow of funds between savers and borrowers, ensuring financial stability and efficiency.
A financial lease is a leasing arrangement where the lessor's role is mainly limited to financing the property, while the lessee takes on the responsibilities of maintenance, insurance, and taxes, resembling a loan in its structure.
Financial leverage refers to the use of debt in a firm's capital structure to amplify the returns on equity. It is an essential concept in corporate finance that can significantly impact a company's earnings and risk profile.
A financial liability is a contractual obligation to deliver cash or another financial asset to another entity or to exchange financial instruments on potentially unfavorable terms.
The branch of financial economics that is concerned with questions of business funding and the management of a business in the interests of shareholders, ensuring effective allocation of resources and maximizing shareholder value.
The Financial Management Rate of Return (FMRR) is a method of measuring the performance of real estate investments, providing a variation on the Internal Rate of Return (IRR) method by addressing some of IRR's limitations.
A financial market is a marketplace where the trading of financial instruments such as stocks, bonds, commodities, and currencies occurs. These markets facilitate the exchange of capital and credit in the economy.
An integral part of financial analysis, financial modelling involves creating representations of the financial performance of a business or project over time. These models aid in decision-making by simulating different scenarios and outcomes based on historical data and assumptions.
The Financial Ombudsman Service (FOS) is a UK body set up to handle complaints about financial services and products, providing a crucial mechanism for consumer protection.
A financial period, also known as an accounting period, is a specific timeframe within which financial performance is measured and reported for both businesses and individuals. This span is essential for preparing periodic financial statements and evaluating profitability, financial position, and cash flows.
The financial perspective focuses on how businesses can meet their goals in terms of profitability, growth, and shareholder value. It is one of the key facets of the Balanced Scorecard framework.
A financial plan is a comprehensive strategy designed to help individuals or businesses achieve specific financial goals, both short and long-term. Financial planning covers aspects such as budgeting, investments, savings, taxes, and retirement planning.
A financial planner is a professional who analyzes personal financial circumstances and prepares a program to meet financial needs and objectives, equipped with knowledge in several domains including estate planning, retirement planning, and investments.
Financial planning involves the formulation of short-term and long-term plans in financial terms to establish goals for an organization to achieve, against which its actual performance can be measured.
The financial position of a firm reflects the status of its assets, liabilities, and equity accounts as of a certain time. This is depicted on its financial statement and is also known as financial condition.
A financial pyramid is a risk structure many investors aim for, distributing their investments among low-, medium-, and high-risk vehicles. It is designed to minimize risk while maximizing potential returns.
A financial ratio is a comparative figure that helps in analyzing the financial health, performance, and viability of a company. Very often, they are used to make informed business and investment decisions.
A financial report consists of a firm's financial statements that provide information about its financial performance and position over a specific period.
The Financial Reporting Council (FRC) is a UK body set up in 1990 to promote high-quality corporate governance and financial reporting.
The Financial Reporting Council (FRC) is a regulatory body established to oversee the accounting, auditing, and actuarial professions, ensuring high standards in financial reporting and corporate governance.
Financial Reporting Exposure Draft (FRED) is a document issued by the Financial Reporting Council (FRC) for discussion and debate prior to the issuance of a Financial Reporting Standard (FRS).
A Financial Reporting Exposure Draft (FRED) is a draft published by standard-setting authorities containing proposed changes to financial reporting standards before they are finalized.
A Financial Reporting Release (FRR) is a pronouncement made by the Securities and Exchange Commission (SEC) in the United States on matters of financial reporting policy.
Financial Reporting Releases (FRRs) are official communications issued by the SEC providing guidance on various accounting and auditing matters to ensure transparency and accuracy in financial reporting.
The Financial Reporting Review Panel (FRRP) monitors the accounting practices of public and large private companies in certain jurisdictions to ensure compliance with legal and regulatory financial reporting requirements.
The Financial Reporting Review Panel (FRRP) is an operating body of the UK Financial Reporting Council, tasked with investigating departures from the accounting requirements of the Companies Acts and empowered to take legal action to rectify such departures. It focuses on the financial reports of public companies and large private companies.
The Financial Reporting Review Panel (FRRP) is an essential entity tasked with upholding the integrity and quality of financial reporting by examining and ensuring compliance with reporting standards.
A comprehensive overview of the Financial Reporting Standard (FRS), a set of standards developed by the Accounting Standards Board and Financial Reporting Council to guide financial reporting practices in the UK and Republic of Ireland.
Financial Reporting Standards (FRS) provide guidelines and regulations on how financial statements should be prepared and presented. These standards ensure consistency, reliability, and comparability of financial reports across different entities, fostering transparency and trust in financial information.
A detailed overview of FRS 102, an accounting standard issued by the Financial Reporting Council in 2013 to supersede previous UK GAAP, bringing it in line with international standards.
The Financial Reporting Standard for Smaller Entities (FRSSE) was a former accounting standard by the Accounting Standards Board (ASB). It provided simplified financial reporting requirements for small entities.
The Financial Reporting Standard for Smaller Entities (FRSSE) offers a simplified and less burdensome framework tailored to smaller companies, ensuring compliance with financial reporting requirements while reducing complexity and administrative effort.
Financial risk refers to the potential for volatility in investment performance due to the use of borrowed money. It indicates the possibility of losing money when investing in financial instruments.
The Financial Services Act 1986 was a landmark UK Act of Parliament aimed at regulating investment business through the Securities and Investment Board and Self-Regulating Organizations. It laid down comprehensive legislation for many of the recommendations of the Gower Report and was superseded by the Financial Services and Markets Act in 2000.
The Financial Services Action Plan (FSAP) was an initiative launched by the European Commission in 1999, aimed at integrating EU financial markets. It consisted of 42 proposed measures intended to be completed by 2005, with significant legislative achievements finalized by 2007.
The Financial Services Action Plan (FSAP) is a comprehensive strategy designed by the European Union to enhance the integration, efficiency, and competitiveness of financial markets within the EU.
Legislation implemented in November 2001, establishing a regulatory framework for UK banking, insurance, and investment. It designated the Financial Services Authority as the key regulator, assuming functions from multiple entities to streamline and enhance regulatory oversight.
The Financial Services Authority (FSA) was an independent, non-governmental body established in 1997 to regulate the financial services industry in the UK. It was abolished in 2013 with its responsibilities divided between the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
The Financial Services Authority (FSA) was a regulatory organization in the United Kingdom responsible for oversight of the financial services industry, encompassing banks, insurance companies, and investment firms.
The Financial Services Compensation Scheme (FSCS) is a protection mechanism, developed under the Financial Services and Markets Act 2000, aimed at safeguarding private investors from financial losses due to the default or bankruptcy of authorized investment firms.
Enacted on November 12, 1999, the Financial Services Modernization Act, also known as the Gramm-Leach-Bliley Act, repealed parts of the Glass-Steagall Act of 1933 and the Bank Holding Company Act of 1956, thereby eliminating remaining firewalls between banks, securities firms, and insurance companies.
Quantitative measures that help determine whether a company or group is likely to meet its financial obligations, including interest, dividends, and capital repayments.
A financial statement is a written record of the financial status of an individual, association, or business organization. It includes a balance sheet, an income statement (or operating statement or profit and loss statement), and may also include a statement of changes in working capital, net worth, and cash flow.
An in-depth analysis of financial statements to assess a business's performance and position, using ratios to evaluate profitability, solvency, working capital management, liquidity, and capital structure.
Financial statements are annual statements summarizing a company's activities over the last financial year, providing a comprehensive overview of its financial health and performance.
The financial structure of a company refers to the specific mixture of long-term debt and equity that it uses to finance its operations. Understanding financial structure is crucial for evaluating financial health and making strategic business decisions.
A company that offers a wide range of financial services under one roof. For example, some large retail organizations offer stock, insurance, and real estate brokerage as well as banking services.
An in-depth overview of the financial year, including definitions, examples, related terms, online resources, and suggested reading materials.
Financing involves the act of providing funds for business activities, making purchases, or investing. It enables companies to meet their objectives through various financial instruments like loans, investment, shares, or bonds.
Financing cost refers to the expense incurred by an entity for funding its operations and activities. These costs can include interest payments on loans, fees for issuing bonds or equity, and other related expenses.
A finder's fee is a commission paid to an intermediary or individual who brings together various parties for a business deal, ensuring the transaction is consummated. This fee can take various forms such as a percentage of the transaction value or a flat rate.
Finished goods are products that have completed the manufacturing process and are ready for distribution to customers.
Finished goods inventory represents the value of products that have completed the manufacturing process and are ready for sale to customers. This inventory is crucial for accurate financial reporting and operational planning.
A budget that outlines in both financial and quantitative terms the planned levels of finished goods at various points during the budget period.
The term 'fire' refers to the act of discharging or terminating an employee from their position. It is one of the most definitive actions a company can take in its relationship with an employee. This term is synonymous with 'sack'.
An overview of the Standard Fire Policy, also known as the 165-line policy, commonly used across states. It includes details about its sections: Declarations, Insuring Agreements, Conditions, and Exclusions.
A material or structure is described as fire-resistive if it can withstand exposure to flames of a specified intensity or for a specified period.
Fire-resistive construction involves the use of engineering-approved masonry or fire-resistive materials for exterior walls, floors, and roofs to reduce the severity of potential fires and subsequently lower insurance premium rates.
Firefox is a popular, free web browser introduced in 2004 by Mozilla. Known for its speed, user-friendly interface, and robust security features, it has been a significant player in the browser market.
The term 'fireproof' refers to materials or structures that are constructed using noncombustible substances or are protected by such means to withstand fire without sustaining major damage.
A firewall in a conglomerate is a strategic barrier designed to segregate the organization, funding, and ownership of different business entities within the group, ensuring that challenges faced by one entity do not adversely affect others.
A firm is any business organization, ranging from individual proprietorships to large corporations, and it can also refer specifically to a business partnership.
In securities underwriting, a firm commitment is an arrangement whereby investment bankers make outright purchases from the issuer of securities to be offered to the public. This arrangement is also known as firm commitment underwriting.
