ACCOUNTING DEFINITIONS 2

B2B is business-to-business. See BUSINESS-TO-BUSINESS.

B2C is business-to-consumer. See BUSINESS-TO-BUSINESS.

B2G is business-to-government. See BUSINESS-TO-BUSINESS.

BACKDOOR LISTING is a technique used by a company which failed to get listed on an exchange, whereby the company acquires and merges with a company already listed on that exchange.

BACKCHARGE is to charge a person or a firm an amount of money in order to make adjustments for a previous transaction.

BACKLOG is value of unfilled orders placed with a manufacturing company. Whether a firm's backlog is rising or falling is a clue to its future sales and earnings.

BACK-TO-BACK TRADING allows securities dealers to trade and settle the same securities several times during the same settlement day without loss of value days.

BACKUP WITHHOLDING is a mandatory withholding that may be imposed when rules regarding taxpayer identification numbers, (usually a Social Security number) are not met by the individual. Another way for these withholdings to take effect is when a notice is issued by the IRS to withhold on payments to that individual. Backup withholding may be claimed as a credit by taxpayers on their federal income tax return.

BAD DEBT is an open account balance or loan receivable that has proven to be uncollectible and is written off.

BAD DEBT EXPENSE see UNCOLLECTIBLE ACCOUNT EXPENSE.

BALANCE is: a. equality between the totals of the credit and debit sides of an account; or, b. the difference between the totals of the credit and debit sides of an account.

BALANCED SCORECARD (BSC) is a strategic management system based upon measuring key performance indicators across all aspects and areas of an enterprise: Financial, Customer, Internal Process, and Learning and Growth.

BALANCE FORWARD ACCOUNTING is where you maintain a list of charges and payments for each account. To find out the balance at any point in time, you add the charges, add the payments, and then subtract total payments from total charges. A billing statement is sent out every month with any balance carried forward from the previous statement

BALANCE OF PAYMENTS / BALANCE OF TRADE is the difference between a country's total export dollar value and its total import dollar value, generally or with respect to a particular trading partner. A positive balance means a net inflow of capital, while a negative means capital flows out of the country.

BALANCE SHEET is an itemized statement that lists the total assets and the total liabilities of a given business to portray its net worth at a given moment of time. The amounts shown on a balance sheet are generally the historic cost of items and not their current values.

BALANCE SHEET GEARING is the ratio of interest-bearing debt to equity.

BALANCING OFF THE BOOKS means totaling off the various amounts to find out how much money is left or, how overdrawn the organization is. At certain times; e.g. once a month, quarterly, for management committee meetings; it may be necessary to 'balance off the books".

BALLOON PAYMENT is a final loan payment that is considerably higher than prior regular payments, in order to pay off the loan.

BANCASSURANCE is a general term describing the broader financial services activities of banks and building societies, in particular their ‘insurance company’ activities.

BANK ADEQUACY RATIO (BAR) is the amount of money which a bank has to have in the form of stockholders' capital, shown as a percentage of its assets. Currently the BAR has been agreed internationally at 8%.

BANK BALANCE is the amount of money in a bank account on a particular date as recorded by a financial institution on a bank statement.

BANK COLLECTION is the collection of a check by the bank on behalf of a depositor.

BANK GUARANTEE is an irrevocable commitment by a bank to pay a specified sum of money in the event that the party requesting the guarantee fails to perform the promise or discharge the liability to a third person in case of the requestor's default.

BANK OVERDRAFT see OVERDRAFT.

BANK RECONCILIATION is the verification of a bank statement balance and the depositor’s checkbook balance.

BANK STATEMENT is a statement reporting all transactions in the accounts held by the account holder.

BANKRUPTCY is a state of insolvency of an organization or individual, i.e. an inability to pay debts. In the U.S., bankruptcy can take either of three forms:

A) Chapter 7 is involuntary liquidation forced by creditor(s). Some companies are so far in debt that they can't continue their business operations. They are likely to "liquidate" and are forced to file under Chapter 7. The courts take over and administers through a court appointed trustee. Their assets are sold for cash by a court appointed trustee. Administrative and legal expenses are paid first, and the remainder goes to creditors;

B) Chapter 11 is voluntary by the debtor. Unless the court rules otherwise, the debtor stays in control of the enterprise. The U.S. Trustee, the bankruptcy arm of the Justice Department, will appoint one or more committees to represent the interests of creditors and stockholders in working with the company to develop a plan of reorganization to get out of debt.; and,

C) Chapter 13 bankruptcy, a debtor proposes a 3-5 year repayment plan to the creditors offering to pay off all or part of the debts from the debtors' future income. The amount to be repaid is determined by several factors including the debtors' disposable income. To file under this chapter you must have a "regular source of income" and have some disposable income. Like in a Chapter 7, corporations and partnerships may not file under this chapter.

BAR see BANK ADEQUACY RATIO.

BARRIERS TO ENTRY are obstacles to the entry of new firms into a market. Barriers to entry may take various forms. They may be technical barriers, legal barriers or barriers that arise from strong branding of the product.

BARS is an acronym for Base Accounts Receivable System.

BARTER SYSTEM see TRADE EXCHANGE.

BAS, among many others, can mean Basic Accounting System, Business and Administrative Services, or Bachelor of Arts and Sciences.

BASE AMOUNT is the fundamental numerical assumption from which something is begun or developed or calculated or explained, e.g. base pay.

BASE CAPITAL includes (1) shares that (a) are non-cumulative, non-retractable, non-redeemable and, if convertible, are only convertible into common shares, and (b) have been issued and paid for; base capital also includes (2) contributed surplus, and (3) retained earnings.

BASE TAX YEAR is the tax year prior to the subject tax year.

BASIC ACCOUNTING normally includes the areas of Debits and Credits; Accounts; Assets, Liabilities, Equity, Revenue and Expenses; and, an accounting system that offers a method for checking, balancing, and reconciling all accounting related transactions in order to produce accurate pictures of the entities financial health. Profit and Loss Reports, Balance Sheets, and Cash Flow Statements are the end result of compiling all the transactions into meaningful, usable information for individuals and business owners alike.

BASIC DEFENSE INTERVAL (BDI) is a measure that if for some reason all of your revenues were to suddenly cease, the Basic Defense Interval (BDI) helps determine the number of days your company can cover its cash expenses without the aid of additional financing. The BDI is calculated: (Cash + Receivables + Marketable Securities) / ((Operating Expenses + Interest + Income Taxes) / 365) = Basic Defense Interval.

BASIC EARNINGS POWER (BEP) is useful for comparing firms in different tax situations and with different degrees of financial leverage. This ratio is often used as a measure of the effectiveness of operations. Basic Earning Power measures the basic profitability of Assets because it excludes consideration of interest and tax. This ratio should be examined in conjunction with turnover ratios to help pinpoint potential problems regarding asset management. Formula: EBIT / Total Assets

BASIC NET INCOME PER SHARE is always reported as net income per share on an undiluted basis. The calculation of diluted net income per share includes the effect of common stock equivalents such as outstanding stock options, while the calculation of basic net income per share does not.

BASIC TENETS OF ACCOUNTING are four in number: 1. Assets = Liabilities + Owner's Equity, 2. Debits = Credits, 3. Assets are on the left (debit side), and, 4. Liabilities and Equity are on the right (credit side).

BASIS, generally, is that figure or value that is the starting point in computing gain or loss, depreciation, depletion, and amortization of a company. Specifically, it is the financial interest that the Internal Revenue Service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset. If a property was acquired by purchase, the owner's basis is the cost of the property plus the value of any capital expenditures for improvements to the property, minus any depreciation allowable or actually taken. This new basis is called the ADJUSTED BASIS.

BASIS, in investments, is the cost or book value of an investment. The gain or loss on an investment is the sale price less the basis. Basis is often called "cost basis."

BASIS POINTS is 0.01% in yield. For example, in increasing from 5.00% to 5.05%, the yield increases by five basis points.

BATCH is a collection of things or persons to be handled or processed together.

BATCH COSTING is the identification and assignment of those costs incurred in completing the manufacture of a specified batch of components. Having arrived at the batch cost, the unit cost is simply derived by dividing it by the number of components in the batch.

BATCHING, in accounting, is the gathering and organizing of incoming invoices prior to processing.

BAY, in business / accounting, means Buy Another Yearly.

BBA can mean: Bachelor of Business Administration, Balanced Budget Act of 1997, Budget Activity Account, Budget By Account, British Bankers Association, Black Business Association, etc.

BCF is an acronym for Broadcast Cash Flow.

BCL is an acronym for, among others, Bank Comfort Letter or Bachelor of Canon/Civil Law.

B/D is Brought Down (T-accounts).

BDI see BASIC DEFENSE INTERVAL.

BE, dependent upon usage, can mean Best Estimate, Best Effort, or Bill of Exchange.

BEAR MARKET is a market characterized by falling prices for securities.

BEHAVIOURAL ACCOUNTING is the explanation and prediction of human behavior in all possible accounting contexts, e.g., adequacy of disclosure, usefulness of financial statement data, attitudes about corporate reporting practices, materiality judgements, and decision effects of alternative accounting procedures.

BELOW THE LINE, in accounting, denotes credits or debits affecting balance sheet accounts rather than the income statement. Extraordinary items may also appear below the net profit line in the income statement, but accounting standards-setters have increasingly favored reflecting most such items in periodic net income.

BENCHMARK is a study to compare actual performance to a standard of typical competence; or, a standard for the basis of comparison as being above, below or comparable to.

BENEFICIAL OWNER is the person who enjoys the benefits of ownership even though title is in another name (often used in risk arbitrage).

BENEFICIARY is a person who benefits from the terms of a trust, pension or provident fund, or other deferred income plan, or an insurance policy. In banking, it is the person in whose favor a letter of credit is issued or a draft is drawn.

BENEFIT see TAXABLE BENEFITS.

BENEFIT PERIOD is the projected useful life time period over which an asset will be productive.

BEST PRACTICES are the generally understood operational characteristics of corporations which have been successful in terms of high repayment rates, significant outreach, and progress towards surplus generation.

BETA, in securitites, is a statistical measurement correlating a stock's price change with the movement of the stock market. The beta is an indicator or statistical measure of the relative volatility of a stock, fund, or other security in comparison with the market as a whole. The beta for the market is 1.00. Stocks with betas above 1.0 are more responsive to the market, but are also more risky investments. Stocks with a beta below 1.0 tend to move in the opposite direction of the market. For example, if the market moves 10%, a stock with a beta of 3.00 will move 30%; a stock with a beta of .5 will move 5%.

BID PRICE see ASK PRICE.

BIFURCATED generally means to be divided into or made up of two parts. In accounting an example would be: to split the cash account in the accounting records into two accounts, cash – principal and cash – income.

BIG BATH is a business strategy in which a company manipulates its income statement to make poor results look even worse. Strategy being that the following year will show significant improvement. Big bath is sometimes employed by new CEOs to make their first years results more impressive by employing big bath accounting to prior year results.

BIG 4 usually refers to the largest accounting firms: Deloitte & Touche, Ernst and Young, KPMG, and PricewaterhouseCoopers.

BILL is a : to enter in an accounting system : prepare a bill of (charges) b : to submit a bill of charges to c : to enter (as freight) in a waybill d : to issue a bill of lading to or for; e.g., "billable expenses" are those expenses for which reimbursement invoices are issued.

BILLABLE are those costs and/or expenses that are covered under a contractual agreement between two entities that may be billed to the receiving entity.

BILLABLE HOURS is professional hours worked and billed to clients.

BILL AND HOLD see SHIP IN PLACE.

BILL AND HOLD INVENTORY see SHIP IN PLACE.

BILLBACK, in e-commerce and credit card transactions, is a means of recovering or reducing interchange fees for transactions clearing differently than planned. The processing company (FDC) passes through the charges to the merchant.

BILLINGS is the request for payment of a debt.

BILLINGS, generally, is the request for payment of a debt. In accounting, it is sales for which invoicing has been issued.

BILLINGS IN EXCESS OF COSTS see COST IN EXCESS OF BILLINGS.

BILL IN PLACE see SHIP IN PLACE.

BILL OF EXCHANGE see DRAFT.

BILL OF LADING is the contract between the owner of the goods and the cargo carrier to move the goods to a specified destination. A clean bill of lading is issued by the carrier verifying receipt of the merchandise in apparent good condition (without visually apparent damage or defect). Bills of lading can sometimes be made to cover the whole trip, or separate bills of lading can be prepared for each carrier. Ocean shipments generally require two, an Inland Bill of Lading covering land transportation to the port and an Ocean Bill of Lading covering the ship portion. Bills of lading are negotiable while cargo is in transit.

BILL OF MATERIALS (BOM) is a listing of all the assemblies, sub-assemblies, parts, and raw materials that are needed to produce one unit of a finished product. Each finished product has its own bill of materials.

BILL OF SALE is a written statement attesting to the transfer (sale) of goods, possessions, or a business to a buyer.

BILLS PAYABLE, in merchant accounts, are all bills which have been accepted, and promissory notes which have been made, are called "bills payable," and are entered in a ledger account under that name, and recorded in a book bearing the same title.

BILLS PURCHASED, in trade finance, allows a seller to obtain financing and receive immediate funds in exchange for a sales document not drawn under a letter of credit. The bank will send the sales documents to the buyer's bank on behalf of the seller.

BILLS RECEIVABLE, in merchant accounts, are all promissory notes, bills of exchange, bonds, and other evidences or securities which a merchant or trader holds, and which are payable to him.

BIN CARD is a stock status recording document for a particular material/item held in a stock room. It is for the recording of stock receipts and issues and the running balance which should be on hand.

BIR is Bureau of Internal Revenue, Benefit/Investment Ratio, or Best Incremental Return.

BLACK HOLE EXPENDITURE is a capital R&D expenditure that does not give rise to a depreciable asset and is not otherwise deductible.

BLACK MARKETS are created when buyers and sellers meet to negotiate the exchange of a prohibited or illegal good. More generally, it is any unofficial market in which prices are inordinately high.

BLANKET AUTHORIZATION is direct authority to act without having to gain approval for each action. For example: "Blanket authorization was given to him for all his business travel".

BLANKET PURCHASE ORDER is a long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates.

BLENDED COSTS is the cost of pre-set multiple items or processes that result in more than one end result or product. In a sense it is a form of cost averaging rather than stand-alone costing of one given product or identified process.

BLIND RECEIVING is a method to ensure more accurate warehouse receipt counts, i.e., PO quantities or items are not displayed on receiving tickets.

BLIND TRUST is a trust where assets are not disclosed to their owner.

BLUE CHIP COMPANY, in the equities market, is typified by a large and creditworthy company. Such a company is renowned for the quality and wide acceptance of its products or services. Blue chip companies consistently make money and pay dividends.

BLUE SKY LAW is a law providing for state regulation and supervision of the issuance of investment securities.

BMR, among others, is Base Mortgage Rate.

BOA is Board of Auditors, Bank of America, Board of Adjustment, or Basic Ordering Agreement.

BOM see BILL OF MATERIALS.

BONA FIDE GUARANTY covers a specific element of a secured transaction, for example, the integrity of receivables or the accuracy of inventory count.

BOND is a certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.

BOND COVENANT are agreements within a bond that can either be negative or positive in the view of the bondholder, e.g., a negative bond covenant is a bond covenant that prevents certain activities unless agreed to by the bondholders.

BONDED is to: a. secure payment of duties and taxes on (goods) by giving a bond; or, b. convert into a debt secured by bonds; or, c. provide a bond for or cause to provide such a bond (e.g., to bond an employee) that guarantees any monetary loss caused by intentional acts by the bonded employee.

BONDED WAREHOUSE is a warehouse authorized by customs officials for the storage of goods on which payment of duty is deferred until the goods are removed.

BOND DISCOUNT is the excess of a bond face value over issued price.

BOND FUND see GLOBAL MUTUAL FUND.

BOND INDENTURE is the title specifying all the obligations of the issuing company to the bondholder.

BONDING is generally used by service companies as a guarantee to their clients that they have the necessary ability and financial tracking to meet their obligations. Bonds are also used to guarantee payment of duty for U.S. Customs entry.

BOND PREMIUM is the excess of the issue price over the face value of the bond.

BOND REFERENDUM see REFERENDUM.

BOND SINKING FUND is a provision to repay a bond.

BONUS is remuneration over and above regular salary.

BONUS ISSUE see SCRIP ISSUE.

BOOK(S) when used as a noun refers to journals or ledgers (for example: cash book). When used a verb it refers to the recording of an entry (for example: to book the sale).

BOOKBUILD is a particular way of conducting a float where the price at which shares are sold is not fixed, but rather is determined following a process in which interested investors bid for shares. This is quite a common way of determining the price paid for shares by institutional investors (Funds Managers).

BOOK COST, normally, is the cost at the time an asset is purchased or realized, i.e. the total amount paid to acquire an asset.

BOOK-ENTRY-ONLY are securities that are recognized as belonging to a particular owner, without the creation of a physical stock certificate.

BOOK-ENTRY-SECURITIES see BOOK-ENTRY-ONLY.

BOOK INCOME is the income reported within the financial statements of the taxable entity, i.e., taxable income normally is not aligned with the financial income (book income) reported within financial statements

BOOKING, in import / export, is an arrangement with a shipping company to load and carry a shipment.

BOOK INVENTORY is the acquistion cost of all inventory less liabilities associated wth the inventory. See BOOK VALUE.

BOOKKEEPING is the recording of business transactions.

BOOK OF ACCOUNTS see LEDGER.

BOOK OF FINAL ENTRY see LEDGER.

BOOKS OF ACCOUNT are the financial records of a business. Usually refers to the lowest level of recorded data, before summaries are made.

BOOKS OF RECORD are all mandatory entries into those documents that track the activity, events, or decisions pertaining to the subject for which the records are maintained, e.g., board of director minutes, births or deaths, and marriage licenses.

BOOK-TAX DIFFERENCE is pretax book income minus tax net income.

BOOK-TO-BILL RATIO is the ratio of orders taken (sic booked) to products shipped and bills sent (sic billed). The ratio is a measure of whether a company has more, equal to or less than the orders than it can likely produce and deliver. The book-to-bill ratio is primarily of interest to investors or traders in the high-tech sector.

BOOK-TO-MARKET is the ratio of the firm's book equity to market equity.

BOOK VALUE is an accounting term which usually refers to a business' historical cost of assets less liabilities. The book value of a stock is determined from a company's records by adding all assets (generally excluding such intangibles as goodwill), then deducting all debts and other liabilities, plus the liquidation price of any preferred stock issued. The sum arrived at is divided by the number of common shares outstanding and the result is the book value per common share. Book value of the assets of a company may have little or no significant relationship to market value.

•Tangible Book Value is different than Book Value in that it deducts from asset value intangible assets, which are assets that are not hard (e.g., goodwill, patents, capitalized start-up expenses and deferred financing costs).
•Economic Book Value allows for a Book Value analysis that adjusts the assets to their market value. This valuation allows valuation of goodwill, real estate, inventories and other assets at their market value.
BOOK VALUE OF EQUITY is the difference between the book value of assets and the book value of liabilities.

BOOKKEEPING is the art, practice, or labor involved in the systematic recording of the transactions affecting a business.

BOOK PROFIT see BOOK INCOME.

BOOT is money received during an exchange to equalize values, e.g. if a person sells his business for an assumption of liabilities and for some cash the cash is 'boot.'

BORROWING COSTS is the financial costs incurred by an enterprise in connection with the borrowing of funds, i.e. interest, amortization of discounts or premiums arising on the issue of debt securities, loan fees, gains and losses on foreign currency differences related to borrowed funds and regarded as an adjustment to interest costs.

BOTTOM LINE, in accounting/finance, is specifically net income after taxes. In general, it is an expression as to the end results of something, e.g. the net worth of a corporation on a balance sheet, sales generated from a marketing campaign, or final decision on most any subject (Often said: “give me the bottom line”).

BOTTOM UP is a concept of analyzing a subject, such as costs or revenue, starting from the lowest level working towards the top.

BOUGHT LEDGER see LEDGER.

BOUNCED CHECK is a check written for an amount exceeding the checking account balance that is subsequently rejected for payment due to insufficient funds.

BOY is Beginning Of Year.

BPO, dependent upon usage, could mean Business Process Outsourcing, Business Process Optimization, Blanket Purchase Order, Broker Price Opinions, Business Process Object, or Bank Payment Order.

BR could be Backward Reporting or Bad Register.

BRANCH ACCOUNTING is accounting for geographically separated sections of enterprises. The accounting system adopted depends upon the degree to which the branch is controlled from its head office.

BRAND IMAGE is the view held by consumers about a particular brand of good or service. The stronger the brand image the more inelastic the demand for the product is likely to be.

BRAND LOYALTY is a situation when a consumer is reluctant to switch from consumption of a favored good. The consumer is "loyal" to the brand.

BRAND NAME is a name given to a product or service.

BREACH OF CONTRACT is the failure to perform provisions of a contract.

BREAK-EVEN ANALYSIS is an analysis method used to determine the number of jobs or products that need to be sold to reach a break-even point in a business.

BREAK-EVEN EQUATION is the equation that determines BREAK-EVEN POINT. Let p = unit selling price, v = unit variable cost, FC = total fixed costs, x = sales in units. The equation: px = vx + FC.

BREAK-EVEN POINT is the volume point at which revenues and costs are equal; a combination of sales and costs that will yield a no profit/no loss operation.

BREAK-EVEN SALESsee BREAK-EVEN POINT.

BRIDGE LOAN (BRIDGING LOAN) is an equity loan secured to solve short-term financing problem.

BRITISH-AMERICAN MODEL is an accounting model. There are other accounting systems which differ from the U.S. accounting model. U.S. GAAP and FASB standards are not the only accounting principles used internationally; for example, many countries reverse the U.S. debit and credit system. Many countries with high rates of inflation account for inflation in financial reports much more than the U.S. does. Also, for any company operating internationally there is the currency exchange translation problem when consolidating financial statements.

BROKERAGE, dependent upon usage, is the business of a broker; charges a fee to arrange a contract between two parties, or, the place where a broker conducts his/her business.

BROUGHT FORWARD is the recognition of a value that was determined in the past, e.g. an accumulated balance brought forward at the start of a new accounting period.

BSP is Business Service Provider, Billing and Settlement Plan (airlines), Business Systems Planning, or Bank Settlement Plan.

BUDGET is an itemized listing of the amount of all estimated revenue which a given business anticipates receiving, along with a listing of the amount of all estimated costs and expenses that will be incurred in obtaining the above mentioned income during a given period of time. A budget is typically for one business cycle, such as a year, or for several cycles (such as a five year capital budget). Of the many kinds of budgets, a CASH BUDGET shows CASH FLOW, an EXPENSE BUDGET lists expected payments of money, and a CAPITAL BUDGET shows the anticipated payments for CAPITAL ASSETS. See FORECAST, PROJECTION.

BUDGETARY ACCOUNTING, contrary to financial accounting, looks forward: it measures the cost of planned acquisitions and the use of economic resources in the future.

BUDGETARY DEFICIT occurs when expenditures are greater than revenues.

BUDGETARY CONTROL is a control technique whereby actual results are compared with budgets. Any differences (variances) are made the responsibility of key individuals who can either exercise control action or revise the original budgets. See BUDGET CONTROL.

BUDGET CONTROL is actions carried out according to a budget plan. Through the use of a budget as a standard, an organization ensures that managers are implementing its plans and objectives. Their actual performance is measured against budgeted performance. See BUDGETARY CONTROL.

BUDGETING is the documenting of intended expenditures over a specified time period (normally one year) along with proposals for how to meet them. See also ZERO BASED BUDGET.

BUDGET PERFORMANCE REPORT is the comparison of planned budget and actual performance.

BUDGETING PROCESS is a systematic activity that develops a plan for the expenditure of a usually fixed resource, such as money or time, during a given period to achieve a desired result.

BUDGET REVIEW PROCESS is a formalized process designed to provide an open, inclusive, and objective process by which to allocate entity resources. Allocation of resources should: a. Be consistent with the Mission and Strategic Plan, and the President’s budget priorities for the entity, b. Meet the requirements set forth by the board of directors, and c. Support appropriate and prudent long term fiscal stability and sustainability.

BUFFER is anything that stands between two other things. For example, an inventory buffer would be additional inventory over and above committed or planned inventory. The inventory buffer will act as an inventory reserve to ensure that sufficient inventory is available when and if required, i.e., the buffer inventory stands between committed inventory and 'out-of-stock' status.

BUFFER STOCK see STOCK RESERVE.

BURDEN RATE, when referring to personnel burden, is the sum of employer costs over and above salaries (including employer taxes, benefits, etc.). When referring to factory or manufacturing see OVERHEAD.

BURN RATE is the rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations. It is the rate of negative cash flow, usually quoted as a monthly rate.

BURSARY is the treasury of a public institution or religious order.

BUSINESS ANALYST, in securities/investment industry, is a person with expertise in evaluating financial investments; a business analyst performs investment research and makes recommendations to institutional and retail investors to buy, sell, or hold; most analysts specialize in a single industry or business sector.

BUSINESS COMBINATION is the merger of separate entities or operations of entities into one reporting entity.

BUSINESS ENTITY is a selection of the legal form under which a business is to operate: sole proprietorship, general partnership, corporation, S corporation (in the U.S.), or, a limited liability company.

BUSINESS ENTITY PRINCIPLE is where the business is seen as an entity separate from its owner(s) that keeps and presents financial records and prepares the final accounts and financial statements. The accounting is kept for each entity as a whole (groups of companies must present consolidated accounts and consolidated financial statements).

BUSINESS MATRIX, often used in business incubators, is where separate business entities join forces to advance the development of a start-up, e.g.., one firm may offer offices, another marketing/sales assistance or manufacturing expertise, etc. Such a matrix may receive compensation in the form of equity from the start-up being assisted by that business matrix.

BUSINESS PLAN is a description of a business (normally over a 1-5 year period). A basic business plan includes: product(s) and/or service(s), the market, competitor analysis, the key people involved, financing needs, and the financial rewards if the business plan is implemented successfully. A well-prepared business plan plays two important roles, firstly, it is a useful management tool that can help management plot a course for the company, and secondly, it is a vital sales tool that will impress funding sources, e.g., venture capitalists or the board of directors, with management's planning ability and general competence. Other things being equal, a well prepared business plan will increase a company's chances of obtaining a financial commitment to fund the business.

BUSINESS PROCESS REENGINEERING (BPR) is the analysis and radical redesign of business processes using objective, quantitative methods and tools and management systems to accomplish change or performance improvement. Also called: Re-Engineering, Reengineering, Process Reengineering, Process Quality Management, BPR, Process Innovation, Process Improvement, and Business Process Engineering

BUSINESS PUBLICATIONS AUDIT (BPA) is similar to the Audit Bureau of Circulation; the BPA is a third-party organization that verifies the circulation of print media through periodic audits.

BUSINESS RISK see OPERATING RISK.

BUSINESS SEGMENT is a component of an enterprise that (a) provides a single product or service or a group of related products and services and (b) that is subject to risks and returns that are different from those of other business segments.

BUSINESS-TO-BUSINESS (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G).

BUSINESS TRANSACTION see TRANSACTION.

BUSINESS UNIT is equivalent to a wholly owned subsidiary except that it is not treated as a separate legal entity. It is an organization within a firm that could operate separately because it has all support functions contained within the business unit. The internal financial reporting from a business unit to the corporate office is basically identical to a separate legal entity.

BUSINESS VALUATION determines the price that a hypothetical buyer would pay for a business under a given set of circumstances.

BUYER'S MARKET is where the quantity of goods for sale exceeds the amount consumers are willing and able to buy at the current market price. It is characterized by low prices. For example, a market condition that occurs in real estate where more homes are for sale than there are interested buyers.

BUY SIDE refers to investors such as pension funds, mutual funds and hedge funds, which buy and sell securities through brokers and dealers.

BVAL is Business Valuator Accredited for Litigation.

BVI is an acronym for British Virgin Islands (a major offshore banking and corporation player).

B/W is Black & White, Between, or Bundled With.

B/(W) is Better or Worse.

BYLAWS are the provisions of corporate policies.

BY-PRODUCTS are incidental products resulting from the processing of another product.