IMPORTANT AND USEFUL MATERIAL AVAILABLE AT COST-ACCOUNTANTS
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FA, dependent upon usage, can mean Fixed Assets, Financial Advisor, Feasibility Analysis, Funds Allocated, Financial Assurance, Financial Agent, Financial Aid, or Factor Analysis.
FACE VALUE is the value printed or written on the face of a asset, e.g. on a bill or bond.
FACTORING is the practice of buying debt at a discount, e.g., if somebody owes you $10,000 payable within a year, a factoring lender may pay you $9,000 for the debt. You receive $9,000 cash quickly, but at the cost of the $1,000 discount.
FACTORY OVERHEAD is the costs of operating a factory which cannot be assigned directly to a specific department or product.
FAF is Financial Accounting Foundation or Financial Aid Form.
FAIR LABOR STANDARDS ACT is a U.S. federal law that enforces a group of minimum standards that employers must abide by when hiring employees.
FAIR MARKET VALUE is the price at which a willing seller will sell and a willing buyer will buy, in an arms- length transaction, when neither is under compulsion to sell or buy and both have reasonable knowledge of relevant facts.
FAIR VALUE, under GAAP, is the amount at which an asset could be bought or sold in a current transaction between willing parties, other than in liquidation. On the other side of the balance sheet, the fair value of a liability is the amount at which that liability could be incurred or settled in a current transaction between willing parties, other than in liquidation.
FALSIFICATION is the act of rendering something false as by fraudulent changes, e.g. financial reports and documents. SEE FALSIFY.
FALSIFY is inserting misleading words into texts or reporting inaccurate data as being true, often falsifying it thereby.
F&A is Facilities and Administrative Costs (aka Indirect Costs or Overhead), Fabrication & Assembly, Finance & Administration, or Finance & Accounting.
F.A.S. (FREE ALONG SIDE), e.g. “F.A.S. New York”, means that, for instance, if goods are shipped from the State of Nevada in the U.S. to Madrid, Spain, no charges for shipment are made to the importer until the goods are "free alongside the vessel" in New York. After this point, charges may be applied to the importer.
FASB see Financial Accounting Standards Board.
FAVORABLE VARIANCE is a variance created by using or spending less of a given resource than specified by the standard, often categorized as rate (spending less per hour for labor for a given amount of production), efficiency (using less hours for a given amount of production), usage (using less materials for a given amount of production) or price (paying less to a vendor for a given purchased item).
FBWT, in finance, is Fund Balance With Treasury.
FCIA (FOREIGN CREDIT INSURANCE ACT) is an EximBank program that offers credit insurance against losses due to political conflict or buyer default.
FCPA, in Australia and elsewhere, is Fellow Certified Practicing Accountant.
FDI is Foreign Direct Investiment.
FEDERAL UNEMPLOYMENT TAX ACT (FUTA) is a U.S, federal law providing guidelines for the unemployment compensation system. A Federal tax is paid by all liable employers to fund the administration of Federal and State unemployment insurance programs and the extended benefits program. FUTA provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax.
FEE ABSOLUTE see FEE SIMPLE.
FEE ACCOUNTANT is an individual who performs manual or automated bookkeeping services and/or maintains the official accounting records.
FEEDBACK is the process in which part of the output of a system is returned to its input in order to regulate its further output, e.g. a management feedback system would assess the effectiveness of management or a given process and feed the analyzed results back into management for development of positive change.
FEE SCHEDULE is a schedule or list of fees to be paid or benefits that will be received under listed professional procedures or benefits.
FEES EARNED is an income statement account that reports the amount of service revenues earned during the time period stipulated in the heading of the income statement.
FEE SIMPLE is absolute ownership of real property; owner is entitled to the entire property. This includes unencumbered right of disposition during his/her life and upon death the real property passes to his/her heirs. Also known as FEE SIMPLE ABSOLUTE and FEE ABSOLUTE.
FEE SIMPLE ABSOLUTE see FEE SIMPLE.
FEE SIMPLE DETERMINABLE is a fee simple which automatically comes to an end when a stated event occurs or, perhaps, fails to occur.
FF&E is Furniture, Fixtures & Equipment (in real estate).
FFO - FUNDS FROM OPERATIONS is used by real estate and other investment trusts to present the cash flow from trust operations i.e., earnings plus depreciation and amortization.
FFP, dependent upon usage, is Federal Financial Participation, Firm-Fixed-Price (Contract), or Fixed Fee Procurement.
FGAR is Florida Government Accountability Report.
FGI see FINISHED GOODS INVENTORY.
FICA (FEDERAL INSURANCE CONTRIBUTIONS ACT) is the U.S. law requiring U.S. employers to match the amount of Social Security tax deducted from an employee's paycheck.
FICTITIOUS ASSET is debit balance includes on balance sheets as assets that do not conform to the definition of an asset. Intentional includes of assets known to be fictitious assets may be ruled as fraud.
FICTITIOUS NAME is often referred to as a DBA, "Doing Business As," a fictitious name is frequently used by sole proprietors or partnerships to provide a name, other than those of the owners or partners, under which the business will operate.
FIDDLY is requiring close attention to detail, i.e. to be fussy (primarily used in Great Britain).
FIDUCIARY is a person or business (for example, a bank or stock brokerage) who has the power and obligation to act for another (often called the beneficiary) under circumstances which require total trust, good faith and honesty.
FIELD TRIAL is a test of the performance of a new product under the conditions under which it is intended be used.
FIFO (first-in, first-out) is an inventory cost flow whereby the first goods purchased are assumed to be the first goods sold so that the ending inventory consists of the most recently purchased goods.
FINANCE, dependent upon usage, is a. the management of money, credit, banking and/or investments; b. the commercial activity of providing funds and capital; c. the branch of economics that studies the management of money and other assets; or, d. to sell or provide on credit.
FINANCE CHARGE is the total dollar amount your loan will cost you. It includes all interest payments for the life of the loan, any interest paid at closing, your origination fee and any other charges paid to the lender and/or broker. In real estate, appraisal, credit report and title search fees are normally not included in the finance charge calculation.
FINANCE LEASE, typically, is a full-payout, non-cancelable agreement, in which the lessee is responsible for maintenance, taxes, and insurance.
FINANCIAL ACCOUNTABILITY tells you what policies your board should adopt or has adopted to meet their responsibility for ensuring that the organization they govern is financially sound. They would then hold those who manage the organization accountable for implementing these policies. Policy areas covered: Finances, Budgets, Asset Protection and Major Risks.
FINANCIAL ACCOUNTING is the area of accounting concerned with reporting financial information to interested external parties.
FINANCIAL ACCOUNTING STANDARDS BOARD (FASB) is a professional organization which develops accounting principles.
FINANCIAL ANALYSIS is analysis of a company's financial statement, usually by accountants or financial analysts.
FINANCIAL CASH FLOW is the cash flows generated by the firm's assets and how those cash flows are distributed to the firm's investors. See CASH FLOW.
FINANCIAL BUDGET is focused on capital expenditures and on a business’s budgeted cash position:
1. CAPITAL BUDGET forecasts large expenditures for items such as machinery. Different companies set different thresholds for what qualifies as a capital expenditure (versus an expense). If the purchase of an item (such as a piece of machinery) is classified as a capital expenditure, it is then depreciated (or amortized in some cases) over a predetermined period of time. The Capital Budget covers Capital Expenditures, Disbursements for Capital Expenditures, and Depreciation Budgets.
2. CASH BUDGET tracks a business’s anticipated cash receipts and disbursements. This is a very detailed and important schedule that draws on information in the Operating Budget.
FINANCIAL CONSULTANT see CHARTERED FINANCIAL CONSULTANT.
FINANCIAL ENGINEERING is a process involving the creation and combination of a variety of financial instruments in order achieve a defined financial objective within certain cost, tax and legal constraints, e.g. combining or dividing existing financial products to create new financial products.
FINANCIAL EXPENSE can mean a. generally in the corporate world, it is a company's interest expense on long-term debt; or, in greater depth it is b. it includes interest and related charges; foreign exchange losses on debt; net expense on the disposal of marketable securities; amortization of bond redemption premiums; additions to provisions for financial liabilities and charges and impairment losses on investments.
FINANCIAL GEARING reflects any borrowing that the company may have undertaken. Operating income will become more volatile with increased financial gearing (borrowing). Thus the shares will have more risk attached to them. More borrowing, more risk. See GEARING and OPERATIONAL GEARING.
FINANCIAL GUARANTEE INSURANCE is insurance created to cover losses from specified financial transactions.
FINANCIAL INCOME is that income that is contained within the financial statements of an entity. Financial income normally is not in alignment with taxable income reported in income tax returns. See TAXABLE INCOME.
FINANCIAL INSTRUMENTS are cash, evidence of an ownership interest in an entity, or a contractual right to receive, or deliver, cash or another financial instrument.
FINANCIAL INSTITUTION is an institution (public or private) that collects funds (from the public or other institutions) and invests them into financial assets.
FINANCIAL INTEREST is any financial interest in or relationship with an entity, including, but not limited to, ownership of stocks, bonds, stock options, warrants, partnership or other equity interests, rights to patent or royalty payments, receipt of consulting fees, honoraria, speaking fees, salary, loans, gifts, lectureship fees, compensation for serving on boards of directors, scientific and other advisory boards, or other remuneration. For the purposes of a "financial interest" disclosure, financial interests DO NOT include stock owned through mutual funds or reimbursement for travel expenses.
FINANCIAL LEVERAGE is the use of debt to increase the expected return on equity. Financial leverage is measured by the ratio of debt to debt plus equity.
FINANCIAL MANAGEMENT is the process of managing financial resources, including management decisions concerning accounting and financial reporting, forecasting, and budgeting.
FINANCIAL PLANNER is a investment professional who assists individuals with long- and short-term financial goals.
FINANCIAL POSITION is the status of a firm's or individual's assets, liabilities, and equity positions as reflected on its financial statement.
FINANCIAL RATIO is the result of dividing one financial statement item by another. Ratios help analysts interpret financial statements by focusing on specific relationships.
FINANCIAL RATIO ANALYSIS is: a. an easy and valuable way to interpret and understand the numbers found in your financial statements. Understanding the relationships between the numbers can help you answer critical questions about your business -- and if you monitor the ratios on a regular basis you'll gain insight into how effectively you are managing your business. And: b. lenders also like to evaluate risk by using several sets of ratios; ratios of assets to liabilities, and ratios of lender-investor dollars to owner-investor dollars. Recognize that ratios are indicators and that only you can tell the full story about your business. So the more adept you are at explaining your financial ratios to your investor/lender, the better she/he will understand your business as he/she makes a investment/credit decision.
FINANCIAL RECORDING is the documentation of financial transactions within an elementary accounting system.
FINANCIAL REPORT could contain financial statements, annual report, SEC Form 10-K, and/or prospectus among other documents, i.e. there is no set format.
FINANCIAL REPORTING RELEASE (FRR), in the U.S., is the policy releases and pronouncements from the SEC (Securities and Exchange Commission).
FINANCIAL RESOURCES is the funds used to acquire the natural, manmade and human resources required to provide products or services; also called capital.
FINANCIAL RESTRUCTURING is a process geared at avoiding the liquidation of the Company. Usually it involves agreement by third parties to satisfy creditors' claims under certain terms and conditions. Financial restructuring may also be carried out by concluding an agreement with all creditors of the Company under which creditors will be paid on somewhat different terms than those initially accepted by the Company when credit and loans were extended. This form of financial restructuring enables the Company to continue its operations and minimize creditors’ losses. See also RESTRUCTURING.
FINANCIAL RESULTS usually refers to the summary financial statements provided in compliance to the GAAP guidelines. They can cover any period(s), but usually cover either: single month, quarter, or annual periods.
FINANCIAL RISK is the possibility of whether a bond issuer will default, by failing to repay principal and/or interest in a timely manner. Usually bonds issued by the federal government, for the most part, are immune from default (if the government needs money... more is printed). Bonds issued by corporations are more probable to be defaulted on, since companies often go bankrupt. Municipalities occasionally default as well, but it is much less common. Can also be called default risk or credit risk.
FINANCIALS see FINANCIAL STATEMENT.
FINANCIAL SCHEDULE, contained in an audited annual report, summarizes the audited financial position of the audited entity. Other application of the term is the scheduling of amounts, not necessarily by date, of major financial events by any given category as to projected receipts, payments, costs, etc.
FINANCIAL STATEMENT is a written report which quantitatively describes the financial health of a company. This includes an income statement and a balance sheet, and often also includes a cash flow statement. Financial statements are usually compiled on a quarterly and annual basis.
FINANCIAL STATEMENT ANALYSIS is analysis of a company's financial statement, usually by accountants or financial analysts. Usually includes indepth financial ratio analysis comparisons over time periods.
FINANCIAL SYSTEM is an information system, comprised of one or more applications, that is used for any of the following: collecting, processing, maintaining, transmitting, and reporting data about financial events; supporting financial planning or budgeting activities; accumulating and reporting cost information; or supporting the preparation of financial statements.
FINANCIAL TREND ANALYSIS is the process of analyzing financial statements of a company for any continuing relationship. Generally, an analysis is made to find out what direction a concern is going, how rapidly, and whether there are enough resources to complete proposed projects.
FINANCIAL VIABILITY is the ability of an entity to continue to achieve its operating objectives and fulfill its mission over the long term.
FINANCING COST is the difference between the cost of financing the purchase of an asset and the assets cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.
FINANCING MARGIN RATIO (FMR) is the margin to be maintained between the debit balance and the actual security value as stipulated in the Facility Letter or any other margin as stipulated by a lending bank from time to time as the FMR.
FINISHED GOODS INVENTORY is that portion of goods in inventory which have completed manufacture and are available for sale.
FINITE SCHEDULING is creating production schedules that automatically take resource availability into account. Schedule dates are moved forward or backward in time as far as necessary to stay within prescribed capacity, and some systems also contain rules to move orders for certain products to approved alternate facilities when the initial resource is full. Finite scheduling systems normally do not ensure that material plans are automatically revised in conjunction with production rescheduling.
FIRM is members of a business organization that owns or operates one or more establishments, e.g. a legal or accounting firm.
FISCAL is belonging to the public treasury; or, pertaining to public finance and financial transactions.
FISCALIST is an economist who prefers that the government affect the economy by raising and lowering taxation and/or government spending.
FISCAL LEVERAGE is the ability of a government to affect economic conditions and/or actions of others through fiscalist policies.
FISCAL PERIOD is a unit of time (corresponding to calendar months) into which the fiscal year is divided. Period 1 is July 1st through July 31st, and so on. An extra accrual period also exists (see 13TH PERIOD).
FISCAL QUARTER is any of the four financial accounting quarters within a fiscal year. See FISCAL YEAR.
FISCAL YEAR is the declared accounting year for a company, but it is not necessarily in conformance to a calendar year (January through December). However, it does cover twelve months, 52 weeks, 365 days. For example, the U.S. government fiscal year ends September 30, i.e. October 1 through September 30 is their fiscal or accounting year.
FIT is Federal Income Tax.
FIXED ASSET is a long-term tangible asset that is not expected to be converted into cash in the current or upcoming fiscal year, e.g., buildings, real estate, production equipment, and furniture. Sometimes called PLANT.
FIXED ASSET INVESTMENT see TRADE INVESTMENT.
FIXED ASSETS are those assets of a permanent nature required for the normal conduct of a business, and which will not normally be converted into cash during the ensuring fiscal period. For example, furniture, fixtures, land, and buildings are all fixed assets. However, accounts receivable and inventory are not. Sometimes called PLANT.
FIXED ASSETS (NET) is all property, plant, leasehold improvements and equipment, net of accumulated depreciation or depletion.
FIXED ASSETS (NET) / NET WORTH measures liquidity by comparing "fixed" assets with "fixed" capital. A lower ratio indicates proportionately smaller investment and a better "cushion" for creditors in case of liquidation. This may be important if the fixed assets are not easily used in other businesses. The presence of substantial leased fixed assets (not shown on the balance sheet) may deceptively lower this ratio. Therefore smaller is better, i.e., greater than .75 (75%) should merit caution.
FIXED ASSET TURNOVER (FAT) measures management's ability to generate revenues from investments in fixed assets. FAT considers only the firm's investment in property, plant and equipment and is extremely important in high asset firms such as manufactures and telecommunications companies. Generally, the higher this ratio:
· the smaller the investment required to generate sales, thus the more profitable the firm.
· indicates the firm has less money tied up in fixed assets for each dollar of sales revenue.
A declining ratio may indicate that the firm has over-invested in plant, equipment, or other fixed assets. Formula: Net Revenues / Fixed Assets
FIXED BOND pays an income stream and redemption payment at maturity than is fixed in monetary terms; however, high inflation will erode the real value of these payments.
FIXED BUDGET is a budget that is not adjusted for changes in the volume of service. See FLEXIBLE BUDGET.
FIXED CHARGE is those expenses incurred each time a batch of product is produced. Primarily consists of ordering cost for the raw material, engineering costs for machine setup and preparation for the production run, and work order processing cost; also known as SETUP COST.
FIXED CHARGE RATIO is calculated: total fixed costs/total expenses.
FIXED COST is a cost that does not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.
FIXED COSTS are operating expenses that are incurred to provide facilities and organization that are kept in readiness to do business without regard to actual volumes of production and sales. Fixed costs remain relatively constant until changed by managerial decision. Within general limits they do not vary with business volume. Examples of fixed costs consist of rent, property taxes, and interest expense.
FIXED DEPOSIT is a specific sum of money deposited in a financial institution for a fixed term earning a pre-agreed interest rate.
FIXED FEE is a set price for the completion of a project. It is easier for the customer to budget, but provides higher risk for the contractor due to cost overruns.
FIXED INCOME is any type of investment that yields a regular (fixed) payment. For example, if you borrow money and have to pay interest once a month, you have issued a fixed income security. When a company does this, it is called a bond (although 'preferred stock' is also sometimes considered to be fixed income). The term fixed income is also applied to people's income which is invariant each period. This could include income derived from fixed income investments such as bonds and preferred stocks or pensions that guarantee a fixed income. See NON-FIXED INCOME.
FIXED OVERHEAD is those costs like rent, utilities, basic telephone, loan payments, etc., that stay the same whether sales go up or down. Variable overhead, on the other hand, are those costs which vary directly with production.
FIXED EXPENSES in the operation of a business are those expenses that remain the same regardless of production or sales volume, i.e. do not fluctuate with sales volume. Contrast with VARIABLE EXPENSES.
FLAG OF CONVENIENCE (FOC) involves the opportunistic registration of ships with national governments that do not impose or effectively administer agreed international standards regarding seaworthiness, safety and health, officer and crew competencies, and employment conditions. For the governments concerned FOC shipping is an easy way to make money. Registration comes at a price in return for turning a blind eye to maritime responsibility, decency and common sense. The classic FOC host has little to do legitimately with the sea and seafaring. For owners of FOC ships, often hidden in corporate mazes and having little to otherwise do with the registering authority, the device is a way of increasing profit margins or turning quick profits.
FLASH REPORT provides highlights of key information promptly to the responsible managerial accountant; also called EXCEPTION REPORT.
FLAT INTEREST refers to charging interest on the full original loan amount, rather than on the declining balance. With group based loans, for example, a common "interest rate" is "3% per month, flat, for 4 months". This means that a $100 principal amount lent is multiplied by 3%, and then by 4 months to come up with $12 in interest. Thus, $112 would be repaid over 4 months in equal installments.
FLAT LEASE is a lease where the cost is fixed for a specific period of time.
FLAT RATE is a per unit price that remains constant regardless of the volume purchased.
FLEXIBLE BUDGET is based upon different levels of activity. It is a very useful tool for comparing actual costs experienced to the cost allowable for the activity level achieved, i.e. it is dynamic in nature as compared to static. A series of budgets can be readily developed to fit any activity level. Flexible budgeting distinguishes between fixed and variable cost, thereby allowing for a budget that can be automatically adjusted to the level of activity actually attained.
FLOAT is 1. the time between the deposit of checks in a bank and when the amount is truly accessible; 2. the amount of funds represented by checks that have been written but not yet presented for payment. Some entities will 'play the float' by writing checks although there are insufficient funds actually on deposit to cover the checks; and, 3. to issue new securities through an underwriter.
FLOTATION COST is the percentage cost of issuing new common stock.
FLOATING RATE CONVERTIBLE NOTE (FRCN) is a debt instrument that is a short-term debt obligation where the interest rate is variable because it is linked to a market rate such as the 3-month T-bill rate or London Interbank Offer Rate (LIBOR), and conditionally allows for the note to be exercised into the security of the debtor in accordance with the conditions set forth in the debt instrument.
FLOATING RATE NOTE (FRN) is a short-term debt obligation where the interest rate is variable because it is linked to a market rate such as the 3-month T-bill rate or London Interbank Offer Rate (LIBOR).
FLOAT MANAGEMENT is to manage depository or checking accounts that do not have any returns associated with them, i.e. it is poor stewardship to leave too much money in checking accounts or other locations that do not maximize returns on that cash, i.e. do not or minimally earn interest income.
FLOOR a series of European interest rate put options used to protect against rate moves below a set strike level.
FLP is Family Limited Partnership.
FLSA is Fair Labor Standards Act.
FMLA is Family and Medical Leave Act of 1993.
FMR see FINANCING MARGIN RATIO.
FOOTING, in accounting, is the sum of a column of figures.
F.O.B. (FREE ON BOARD) is a transportation term that indicates that the price for goods includes delivery at the seller’s expense to a specified point and no further. The FOB term is used with an identified physical location to determine 1) the responsibility and basis for payment of freight charges, and 2) the point a twhich title for the shipment passes from seller to buyer.The FOB location terms, Origin and Destination, may be qualified by modifiers. The modifier determines the payment of the transportation charges. Modifiers denote nothing about the title of the goods or filing of claims. The most three common modifiers are: Collect, Prepaid & Add, and Prepaid & Allow. Collect: The carrier collects the transportation charges from the buyer. Prepaid & Add: The seller prepays the transportation charges, but adds the charges to the invoice for reimbursement from the buyer .Prepaid & Allow: The seller prepays the transportation charges and they are already included in the contract price.
F.O.B. DESTINATION is where the seller retains title and control of goods until they are delivered and the contract of carriage has been completed. The seller selects the carrier and is responsible for the risk of transportation.
FOB POINT OF ORIGIN is where the supplier is responsible for all shipping costs to the point of having the goods loaded unto the vessel for shipment to its destination. The purchaser, from that point forward, is responsible for all further shipping costs to the point of destination, e.g., insurance, transportation, etc.
FOC see FLAG OF CONVENIENCE.
FOLIO, dependent upon application, is a. a book (or manuscript) consisting of large sheets of paper folded in the middle to make two leaves or four pages; or, b. a sheet of any written or printed material (especially in a manuscript or book); or, c. the system of numbering pages; or, d. in investments, an unstructured basket of common stock that may represent a stock index, a sector or theme, or even an actively-managed portfolio at inception, but which may be modified by an investor or an advisor to meet the tax and spending needs of its owner. The rationale for the folio is to take advantage of diversification and the ability to realize tax losses in a separately managed account. In general, an investor will have to devote a fair amount of time to the folio or engage the services of a specialized advisor.
FOOTING is the sum of a column of figures.
FOOTNOTES see NOTES TO THE FINANCIAL STATEMENTS.
F.O.R. (FREE ON RAILROAD) is where goods will be delivered by the exporter to a railway station. The importer is responsible from this point on.
FORECAST is to estimate or calculate expected business results in advance. To plan the business course for the future. A document that sets down the plan. See BUSINESS PLAN, PROJECTION, BUDGET.
FOREIGN is of concern to, or concerning the affairs of, other nations (other than your own) (Example: Foreign trade or companies).
FOREIGN CORRUPT PRACTICES ACT (1977) is a United States federal law that is primarily known for its two main provisions: one that deals with accounting transparency requirements of issuers required to report under the Securities Exchange Act of 1934 and one that deals with bribery of foreign officials.
FOREIGN CURRENCY TRANSLATION is the process of restating foreign currency accounts of subsidiaries into the reporting currency of the parent company in order to prepare consolidated financial statements in the native currency of the parent company.
FOREIGN SALES AGENT or REPRESENTATIVE is an entity that works to sell your merchandise in a foreign country. Equivalent to the “Manufacturer's Representative” in the U.S.
FORENSIC ACCOUNTING provides for an accounting analysis that is suitable to a court of law which will form the basis for discussion, debate and ultimately dispute resolution. Forensic accounting encompasses investigative accounting and litigation support. Forensic accountants utilize accounting, auditing and investigative skills when conducting an investigation. Equally critical is the ability to respond immediately and to communicate financial information clearly and concisely in a courtroom setting.
FORENSIC AUDIT is an examination of evidence regarding an assertion to determine its correspondence to established criteria carried out in a manner suitable to the court. An example would be a Forensic Audit of sales records to determine the quantum of rent owing under a lease agreement, which is the subject of litigation.
FOREX is Foreign Exchange Market. FOREX is a market in which brokers located in various parts of the world trade currencies for many nations. FOREX transactions are not traded in futures markets.
FORMATION is an arrangement of people or things acting as a unit, e.g. the formation of a corporation.
FORM 1065 (Schedule K-1) is the domestic partnership income tax return form used in the U.S.
FORM 1120 is the income tax return form used by corporations in the U.S.
FORESEEABLE is what may be reasonably anticipated.
FORMULA is a standard procedure for solving a class of mathematical problems.
FORWARD INTEREST RATE AGREEMENT is where two entities agree to a fixed interest rate in the future. If the actual rate is different than the fixed rate, one party will pay the other party the present value of the difference between the interest cash flows. Essentially the two entities are gambling on which way the interest rate of an index will change. These contracts are not traded on an established exchange but rather are private contracts between parties.
FORWARD LOOKING STATEMENTS, within the meaning of the U.S. Private Securities Litigation Reform Act of 1995,
are statements made that are not historic and are thereby predictive. You can identify forward-looking statements by use of the words “believe”, “expect”, “anticipate”, “intend”, “estimate”, “assume”, “project” and other similar expressions that predict or indicate future events and trends or that do not relate to historical matters. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
FORWARD PREMIUM is when a currency trade forward price is higher than its spot price.
FOUR-WALL PROFIT is the profit of a retail store with all the overhead expense taken out of the profit calculation.
FP, among others, means Fixed Price.
FP&A is Financial Planning and Analysis.
FRA is Forward Rate Agreement, Financial Responsibility Act, Full Retirement Age (SSA), Fiscal Responsibility Act, Federal Reimbursement Allowance, or Federal Register Act.
FRANCHISE is a legal arrangement giving rights to sell a product or service.
FRAUD is intentional deception resulting in injury to another person or entity
FRCN see FLOATING RATE CONVERTIBLE NOTE.
FREE CASH FLOW is net income plus non-cash charges to income, specifically depreciation and amortization less capital expenditures, to sustain the basic business.
FREEHOLD is a. an interest in land the duration of which is restricted to the life or lives of a particular person or persons holding it, or b. an interest in property that is unconditional and represents the broadest ownership interest recognized by law.
FREE TRADE AGREEMENT is an agreement between countries that will result, over an agreed period of time, in an elimination of duties for goods flowing between the signatories.
FREE TRADE ZONE (FTZ) is an area, usually a port of entry, designated by the country for duty-free entry of goods. As long as the goods do not go into the country from the FTZ, no duty is assessed. While in the FTZ, goods may be processed, packaged, serviced or displayed.
FREIGHT is the charge for transporting something by common carrier.
FREIGHT FORWARDER is an individual or firm that provides for the packing and shipping of merchandise. Generally they also assist with export and other documentation.
FREIGHT OUT is the handling, packaging, and shipping costs of product; normally considered a selling cost.
FREQUENCY, in advertising, is the number of times you hope to reach your target audience through your advertising campaign.
FRESH START ACCOUNTING, upon emergence from bankruptcy, the consolidated financial statements of the "Successor Company" apply the provisions of fresh start accounting in accordance with Generally Accepted Accounting Principles (GAAP). Under fresh start accounting, a new reporting entity, the “Successor Company”, is deemed to be created, and the recorded amounts of assets and liabilities are adjusted to reflect their fair value. As a result, the reported historical financial statements of the “Predecessor Company” generally are not comparable to those of the "Successor Company".
FRF is an acronym for French Francs.
FRIENDLY TAKEOVER consists of a straight buyout of a company, and happens all the time. The shareholders receive cash or (more commonly) an agreed-upon number of shares of the acquiring company's stock.
FRINGE BENEFIT an incidental benefit awarded for certain types of employment (especially if it is regarded as a right) (Example: employer supplied health insurance or two weeks paid vacation per year).
FRN see FLOATING RATE NOTE.
FRR see FINANCIAL REPORTING RELEASE.
FRS is Federal Reserve System or Financial Reporting Standard.
FRS 11 sets out the principles and methodology for accounting for impairments of fixed assets and goodwill. It replaces the previous approach whereby diminutions in value were recognized only if they were regarded as permanent. Instead, the carrying amount of an asset is compared with its recoverable amount and, if the carrying amount is higher, the asset is written down.
FRS 19 is a deferred tax standard. In summary:
A. Deferred tax is provided on timing differences relating to:
- accelerated capital allowances and depreciation
- accruals for and payments of pension and other post retirement benefits
- the elimination of unrealized intra group profits
- unrelieved tax losses
- “fair value revaluations” that are taken annually to the profit and loss account
- other short-term timing differences
B. Deferred tax is not provided on timing differences relating to:
- other fixed asset revaluations, where there is no intention to sell
- gains that are rolled over
- unremitted overseas earnings, where there is no intention to remit.
The FRS 19 Standard also includes further, detailed measurement and disclosure rules.
FSA has several possible meanings, e.g. Flexible Spending Account (employee benefit offered by some companies) or Funding Standard Account.
FSS is Financial System Support. The FSS individual(s) would likely interface to outside organizations, customers, etc. Also, would act as a primary accounting system knowledge resource on whatever accounting system is being utilized.
FTSE 100 is the most widely followed index in Britain. It is an index of the 100 largest London listed companies. This includes many foreign companies but it does not include companies that only have secondary listings in London.
FULL ABSORPTION COSTING see ABSORPTION COSTING.
FULL CHARGE BOOKKEEPER is someone who can do it all - including compiling the data into the General Ledger and preparing financial statements.
FULL COSTING see ABSORPTION COSTING.
FULL COST RECOVERY is adjusting fees/prices for goods/services to where all cost of operations and maintenance are covered for supplying the given goods or services.
FULL CYCLE ACCOUNTING see ACCOUNTING CYCLE.
FULL DISCLOSURE, generally, is the requirement to disclose all relevant or material facts to a transaction.
FULL DISCLOSURE PRINCIPLE see DISCLOSURE PRINCIPLE.
FULLY DEPRECIATED is when an asset has already been charged with the maximum amount of depreciation allowed by the taxing authority for accounting purposes.
FUNCTIONAL-BASED ACCOUNTING focuses on organizational units such as departments and plants, uses financial outcome measures and static standards and benchmarks to evaluate performance, and emphasizes status quo and organizational stability. On the other hand, activity-based accounting focuses on processes, uses both operational and financial measures and dynamic standards, and emphasizes and supports continuous improvement. Activity-based accounting adds a process perspective.
FUNCTIONAL CURRENCY, generally, is the currency of record for any given entity. Within the context of foreign currency, it is the currency which a foreign subsidiary handles on a day-to-day basis in generating net cash flows. It is normally the currency of the country in which the subsidiary operates, but may be the currency of the parent company.
FUND is a pool of money normally set apart for a purpose, for example, a pension fund to provide pensions.
FUND ACCOUNTING is a method of accounting and presentation whereby assets and liabilities are grouped according to the purpose for which they are to be used. Generally used by government entities and not-for-profits.
FUNDAMENTAL ANALYSIS is a method used to evaluate the worth of a security by studying the financial data of the issuer. Performing fundamental analysis will teach you a lot about a company, but virtually nothing about how it will perform in the stock market. Apply this analysis on two competing companies or in comparisone to its industry and it becomes clearer which the best investment choice is. See FUNDAMENTALS.
FUNDAMENTALS are factors which are “fundamental” to the working of a company’s business, its profitability, operating costs, product prices, technical innovations, etc. Company analysis taking into account these fundamental factors facilitates share valuation. See FUNDAMENTAL ANALYSIS.
FUND BALANCE is when liabilities are subtracted from assets, there is a fund balance. A positive fund balance means there are more assets than liabilities; a negative fund balance means just the opposite. Fund balance can be complicated by the fact that part of the fund balance is reserved and part unreserved. The difference between reserved and unreserved is that the unreserved can potentially be authorized for future expenditures while the reserved cannot. Additionally, the fund balance is a residual and not necessarily a cash amount.
FUNDED DEPRECIATION ACCOUNT is a reserve setup to cover the replacement cost of those capital assets covered within the depreciation schedule.
FUND MANAGEMENT is the professional, in many cases regulated, caretaker of client assets for a fee. Dependent upon type of fund, the fund may be authorized to put assets within the fund at risk in the pursuit of profits for the asset owners (clients).
FUNDS EMPLOYED, normally, is the average of Net Working Capital plus Fixed Assets held at the beginning and end of the financial year.
FUNDS FLOW is the funds generated from operations; normally expressed as 'cash flow from operations' or 'working capital from operations'.
FUNDS TRANSFER is money that is withdrawn from one account and transferred into a different account. See also ELECTRONIC FUNDS TRANSFER.
FUND THEORY views the organization as a series of funds or sub-funds represented by various services or departments.
FUTA see FEDERAL UNEMPLOYMENT TAX ACT.
FUTURES are contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future.
FUTURE VALUE is the amount of money that an investment made today (the present value) will grow to by some future date. Since money has time value, we naturally expect the future value to be greater than the present value. The difference between the two depends on the number of compounding periods involved and the going interest rate.
FX ACCOUNT (Foreign Exchange Account) is a trading account usually based in foreign currencies.
FYE is Fiscal Year End.
ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM.
FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA.
COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA.
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