- Accounting Standards Board
The body in the UK that sets accounting statements of practice.
- Acid Test
The ratio of liquid assets to current liabilities.
The relationship between a principal and an agent, for example in a limited liability the company is the principal and the director is the agent.
Similar to depreciation, applied to fixed assets.
- Effective Interest Rate
The rate that changes estimated future cash payments through the expected duration of the financial instrument.
Something that exists independently, for example a business exists independently of its owner.
- Equity Accounting
Reports in the balance sheet of the group’s investment in the share capital of an associated company.
- External Users
Users of financial statements that are not allowed access to financial documents on a day-to-day basis.
- Financial Information
Information that is reported in terms of money.
- Financial Risk
When a company has long-term finance and they can’t commit to repayments on the loan due to interest rates or other financial factors.
The way in which financial statements are laid out in the order they appear.
International Accounting Standard, issued by the IASB’s predecessor body.
Stocks of goods held for resale or manufacture.
An alternative phrase for gearing.
- Loan Stock
Loan finance traded on a stock exchange.
- Off-Balance Sheet Finance
An agreement to keep some assets away from the entity’s balance sheet.
- Operating Margin
Operating profit as a percentage of sales.
- Prospective Investor
An investor that is deciding whether to invest into a company.
The yield or reward on an investment.
The sales of a business or revenue from the operations of a business.