| abatement sequence | The order of reduction of devises in the will of a decedent whose estate property is insufficient to pay all the decedent’s liabilities and cover all devises; the order is as follows: property not specifically mentioned in the will, residuary devises, general devises, specific devises
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| account group | A set of memorandum ledger accounts established voluntarily by a governmental entity to account for plant assets (general capital assets account group) and long-term debt (general long-term debt account group) not recorded in a fund of the governmental entity
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| accountability method | The method of accounting used by a trustee in bankruptcy or by the personal representative of a decedent's estate, evidenced by the equation Assets 5 Accountability
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| Accounting and Auditing Enforcement Releases (AAERs) | A series of pronouncements initiated by the Securities and Exchange Commission (SEC) in 1982 to report its enforcement actions involving accountants and accounting issues
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| Accounting Series Releases (ASRs) | Pronouncements of the chief accountants of the SEC from 1937 to 1982 designed to contribute to the development of uniform standards and practice in major accounting questions
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| acquisition of assets | A business combination in which one business enterprise acquires the gross or net assets of another enterprise by paying cash or issuing equity or debt securities
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| acquisition of common stock | A business combination in which an investor enterprise issues cash or equity or debt securities to acquire a controlling interest in the outstanding common stock of an investee enterprise, which is not liquidated but becomes a subsidiary of the investor parent company
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| administrator | An intestate decedent's personal representative, who is appointed by the probate court
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| affiliate | A business enterprise that is controlled or significantly influenced by another enterprise
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| agency funds | Fiduciary funds of a governmental entity, of short duration, that account for sales taxes, payroll taxes, and other such amounts collected by the governmental entity for later payment to other governmental entities entitled to the taxes and other amounts; also, funds of nonprofit organizations used for assets held by the organizations as custodian
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| agio (spread) | The difference between the selling spot rate and the buying spot rate of a foreign currency
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| American Institute of Certified Public Accountants (AICPA) | The national professional organization of certified public accountants licensed by the states and territories of the United States
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| annual budget | A budget prepared for the general fund and special revenue funds of a governmental entity; includes estimated revenues, estimated other financing sources, appropriations, and estimated other financing uses for a fiscal year
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| annuity fund | A fund established by a nonprofit organization to account for assets contributed to the organization, the income from which is the source of fixed periodic payments to designated recipients for a specified time period
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| appropriations | Authorized expenditures of a governmental entity's general fund and special revenue funds, as approved by the legislative and executive authorities of the entity and set forth in the annual budget
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| associate | The International Accounting Standards Board's term for influenced investee
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| bankrupt | A legal state in which an insolvent debtor is given protection from creditors' claims by the Bankruptcy Court
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| Bankruptcy Code | The federal law governing bankruptcies in the United States
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| bankruptcy liquidation | The procedure under Chapter 7 of the Bankruptcy Code in which a trustee realizes the debtor's nonexempt assets and pays creditors as specified in the Bankruptcy Code
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| bankruptcy reorganization | The procedure under Chapter 11 of the Bankruptcy Code in which a business enterprise is protected from creditor's claims while it develops a plan for restructuring its liabilities and stockholders' equity
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| bargain-purchase excess | The excess of the current fair value of the combinee's identifiable net assets in a business combination over the cost to the combinor
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| beneficiary | The party for whose benefit a trust is established
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| branch | A unit of a business enterprise, located at some distance from the home office, that carries merchandise obtained from the home office, makes sales, approves customers' credit, and makes collections from its customers
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| budgetary deficit | An excess of appropriations and estimated other financing uses over estimated revenues and estimated other financing sources in the annual budget of a governmental entity's general fund
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| budgetary surplus | An excess of estimated revenues and estimated other financing sources over appropriations and estimated other financing uses in the annual budget of a governmental entity's general fund and special revenue funds
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| business combination | An entity's acquisition of net assets that constitute a business or of equity interests in one or more entities and obtains control over that entity or entities
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| buying spot rate | The exchange rate paid by a foreign currency dealer "on the spot"
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| capital budget | A budget prepared for a capital projects fund of a governmental entity; includes the estimated resources available for a capital project and the estimated costs of completion of the project
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| capital expenditures | Expenditures for capital (plant) assets of a governmental entity
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| capital lease | A lease that, from the viewpoint of the lessee, is equivalent to the acquisition, rather than the rental, of property from the lessor
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| capital projects funds | Governmental funds that record the receipt and payment of cash for the construction or acquisition of the governmental entity's capital (plant) assets other than those accounted for in proprietary funds or trust funds
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| cash distribution program | A plan prepared for a liquidating partnership to show the appropriate sequence for paying cash as it becomes available to partnership creditors and to partners
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| cash equivalents | Short-term investments that are readily marketable and have maturity dates no longer than three months
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| certificate | A document evidencing formation of a limited partnership, filed with the county recorder of the principal place of business of the limited partnership
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| change in the reporting entity | A type of accounting change, dealt with in APB Opinion No. 20, "Accounting Changes," that requires an adjustment to beginning-of-period retained earnings
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| channel stuffing | Artificially accelerating product delivery schedules at the end of an accounting period
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| charge and discharge statement | The financial statement prepared on behalf of the personal representative of a decedent's estate, submitted to the probate court; a comparable financial statement prepared on behalf of the trustee of a trust
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| charity care | Health services provided by nonprofit hospitals to indigent patients, there being no expectation of resultant cash flows to the hospital
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| collections | Nonexhaustible resources of nonprofit museums, art galleries, botanical gardens, libraries, and similar nonprofit organizations, for which a determination of fair value is impracticable and depreciation is inappropriate
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| combined enterprise | The accounting entity that results from a business combination
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| combinee | A constituent company other than the combinor in a business combination
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| combinor | A constituent company entering into a business combination whose owners as a group end up with control of the ownership interests in the combined enterprise
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| component of an entity | Operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity
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| component unit | An organization included in a governmental financial reporting entity because the primary government is financially accountable for the organization or because of the relationship of the organization to the primary government
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| comprehensive annual financial report (CAFR) | The annual report required by the Governmental Accounting Standards Board to be prepared by every governmental entity as a matter of public record
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| comprehensive income | The change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources
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| conflict of interest | A situation in which an individual reaps an inappropriate personal benefit from his or her acts in an official capacity
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| conglomerate | A group of affiliated business enterprises in unrelated industries or markets
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| conglomerate combination | A business combination between enterprises in unrelated industries or markets
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| consolidated financial statements | Financial statements of a single economic entity composed of several legal entities (parent company and subsidiaries)
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| constituent companies | The business enterprises that enter into a business combination
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| contingent consideration | Additional cash, other assets, or securities that may be issuable in the future, contingent on future events such as a specified level of earnings or a designated market price for a security that had been issued to complete a business combination
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| contractual adjustments | Discounts from full billing rates of nonprofit hospitals provided in contracts with third-party payors such as Medicare and Medicaid
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| contributory pension plan | A pension plan that requires contributions from employees as well as employers
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| convergence project | A joint activity of the Financial Accounting Standards Board and the International Accounting Standards Board, the goal of which is to compare the two boards' existing standards and conform the two sets of standards into the higher-quality solution
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| "cookie jar reserves" | A "cooking the books" technique that involves establishing fictitious liabilities for bogus expenses or revenue in a highly profitable period, and reversing the liabilities in subsequent low earnings periods
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| "cooking the books" | Fraudulent financial reporting
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| cost method | The method of accounting for an investment in a subsidiary that recognizes parent company revenue only to the extent the subsidiary declares dividends from retained earnings accumulated after the date of the business combination
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| credit risk | The risk of nonperformance by a party to a financial instrument or derivative instrument contract
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| creditors' (involuntary) petition | A bankruptcy petition initiated by creditors of an insolvent debtor in accordance with provisions of the Bankruptcy Code
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| cumulative preferred stock | Preferred stock that requires dividends "passed" in one year to be declared and paid in a subsequent year, together with that year's regular dividends, to preferred stockholders before dividends may be declared and paid to common stockholders
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| current/noncurrent method | A method of translating foreign currency financial statements in which current assets and liabilities are translated at the current exchange rate on the balance sheet date, while other assets, other liabilities, and owners' equity elements are translated at historical rates. Depreciation and amortization expenses are translated at historical rates; all other revenue and expenses are translated at an average rate for the accounting period
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| current rate method | A method of translating foreign currency financial statements in which all balance sheet amounts other than owners' equity are translated at the current exchange rate, while owners' equity elements are translated at historical rates. All revenue and expense items are translated at the appropriate current rate or at an average of current rates
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| "cute accounting" | Stretching the form of accounting standards to the limit, regardless of the substance of the underlying business transaction or events
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| death taxes | Federal estate taxes on the principal of a decedent's estate and state inheritance taxes on devisees receiving devises
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| debt service expenditures | Expenditures for interest on operating debt of a governmental entity, such as short-term loans
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| debt service funds | Governmental funds that account for payments of principal and interest on long-term bonds and other long-term debt of a governmental entity other than special assessment bonds, revenue bonds, and general obligation bonds serviced by an enterprise fund
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| debtor in possession | Management of a business enterprise undergoing reorganization under Chapter 11 of the Bankruptcy Code that continues to operate the enterprise during the reorganization
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| debtor's (voluntary) petition | A bankruptcy petition initiated by an insolvent debtor
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| defined benefit pension plan | A pension plan under which the basis of computation of pension benefits for retired employees usually involves employee compensation, years of service, and age on date of retirement
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| derivative instrument | A financial instrument or other contract that has (1) one or more underlyings and (2) one or more notional amounts or payment provisions or both; requires no initial net investment or a smaller-than-expected initial net investment; and has terms requiring or permitting net settlement or related settlement options
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| designated fund balance | A segregated amount of the fund balance of a nonprofit organization's unrestricted fund or of the general fund of a governmental entity that evidences the earmarking of the fund's net assets for a purpose specified by the organization's governing board or legislative body
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| devise | A transfer of real or personal property in a will
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| devisee | The recipient of a devise
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| direct out-of-pocket costs | Some legal fees, some accounting fees, and finder's fee incurred specifically to accomplish a business combination
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| discharge | Forgiveness of all except specified unpaid liabilities of a debtor that underwent liquidation under Chapter 7 of the Bankruptcy Code
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| discontinued operations | Operations of a component (operating segment) that has been sold, abandoned, spun off, or otherwise disposed of, or, although still operating, is the subject of a formal plan for disposal by a business enterprise
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| discrete theory | A theory of interim financial reporting that considers each interim period a basic accounting period whose operating results are measured in essentially the same manner as for an annual accounting period
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| dissolution | A change in the relationship among partners of a partnership, caused by any partner's ceasing to be associated in the carrying on of the partnership business
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| division | A segment of a business enterprise that generally has more autonomy than a branch; a segment that often was formerly an independent enterprise, but subsequently was a constituent company—typically the combinee—in a business combination
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| downstream intercompany sales | Sales of merchandise by a parent company to a subsidiary of the parent
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| drawing | A partner's withdrawal of cash or other assets from a partnership in accordance with terms of the partnership contract
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| economic unit concept | A concept of consolidated financial statements of a parent company and one or more partially owned subsidiaries that views the consolidated enterprise as a single entity with ownership by parent company stockholders and subsidiary minority stockholders
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| EDGAR | The Electronic Data Gathering, Analysis, and Retrieval project of the SEC, designed to permit "paperless" filings with the SEC over telephone lines, on diskettes, or on magnetic tapes
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| encumbrance accounting | An accounting method for governmental funds of a governmental entity that entails a debit to Encumbrances and a credit to Fund Balance Reserved for Encumbrances when purchase orders or contracts for nonrecurring expenditures are issued by the funds
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| endowment | A gift placed in trust that generally requires the principal of the gift to be maintained intact, with revenues from the investment of the gift used for the purposes specified by the donor of the gift
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| endowment fund | A nonprofit organization's fund whose principal must be maintained intact permanently or temporarily and whose income is expendable by the organization for a specified or elective purpose
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| enterprise funds | Proprietary funds of a governmental entity that account for any activity for which a fee is charged to external users for goods or services
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| equity method | The method of accounting for an investment in a corporate or an unincorporated joint venture that increases the venturer's Investment account balance for the venturer's share of venture net income and decreases the account balance for the venturer's share of venture net losses, dividends, or other cash remittances; also, the method of accounting for an investment in a subsidiary that increases the parent company's Investment account balance for the parent's share of subsidiary net income and decreases the account balance for the parent's share of subsidiary net losses and dividends
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| estate | All the property of a decedent, trust, or other person whose affairs are subject to the Uniform Probate Code
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| exchange rate | The ratio between one unit of each of two foreign currencies
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| executor | The personal representative of a decedent, named in the decedent's will
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| exempt property | Property of a decedent excluded from claims of the decedent's creditors and devisees, including aggregate specified value of automobiles, household furniture and furnishings, and personal effects
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| expendable private-purpose trust funds | Fiduciary funds of a governmental entity, of long duration, that account for the receipt and expenditure of revenues produced by the principal of the trust, which is nonexpendable
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| external investment pools | Pooled investments of small governmental units such as towns and villages, maintained by larger governmental entities such as counties and states, the object being the realization of a larger return on the investments than would be possible apart from the pool
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| family allowance | A reasonable cash allowance, payable in a lump sum not exceeding a specified amount, to the decedent's spouse or children during the administration of an estate
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| fiduciaries | The individuals or business enterprises that manage the property in estates and trusts
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| fiduciary funds | Private-purpose and other trust funds, and agency funds, of a governmental entity that account for resources that are not owned by the entity but are administered by the entity as a custodian or fiduciary
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| financial accountability | A situation in which a primary government appoints a majority of the governing body of another organization and thus imposes its will on the organization or is responsible for providing financial benefits to, or financial burdens on, the other organization
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| Financial Executives International (FEI) | The professional organization of financial vice presidents, controllers, and treasurers of business enterprises
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| financial forecast | Prospective financial statements that present an entity's expected financial position, results of operations, and cash flows
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| financial instrument | Cash, evidence of an ownership interest in an entity, or a contract that imposes both a right on one entity and an obligation on another entity to exchange cash or other financial instruments
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| financial reporting entity | The primary government and other component units that comprise the governmental entity that issues financial reports
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| Financial Reporting Releases (FRRs) | A series of pronouncements initiated by the SEC in 1982 to state its views on financial reporting matters
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| financial resources | Cash, claims to cash such as receivables and investments, inventories, and short-term prepayments of governmental funds of a governmental entity
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| finder's fee | A fee paid to an investment banker or other organization or individuals that investigated the combinee, assisted in determining the price, and otherwise rendered services to bring about a business combination
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| foreign currency transaction | A transaction of a business enterprise that is denominated in a currency other than the local currency of the enterprise
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| foreign currency transaction gains (losses) | Gains and losses recognized on transactions denominated in a foreign currency or in the remeasurement to the functional currency of foreign entities' financial statements maintained in the local currency
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| foreign currency translation | Restating a transaction denominated in a foreign currency to the local currency of the transacting enterprise
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| foreign currency translation adjustments | A balancing amount resulting from the translation of a foreign entity's financial statements from the entity's functional currency to the reporting currency of the parent company or investor enterprise
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| Form 8-K | A current report filed by a publicly owned company with the SEC within a specified number of days following the occurrence of specified events or events elected to be reported by the company
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| Form 10 | A registration statement filed by a publicly owned company with the SEC in connection with trading of the company's securities on a national exchange or over the counter
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| Form 10-K | The annual report filed by a publicly owned company with the SEC within 60 days following the close of the company's fiscal year
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| Form 10-Q | A quarterly report filed by a publicly owned company with the SEC within 40 days following the close of each of the company's first three fiscal-year quarters
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| formal probate | Litigation to determine whether a decedent left a valid will
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| Forms S-1 through S-4 and F-1 through F-4 | Registration statements filed with the SEC by companies that issue securities to the public interstate
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| forward contract | An agreement to exchange currencies of different countries on a specified future date at the forward rate in effect when the contract was made
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| forward rate | The rate of exchange between foreign currencies to be exchanged on a future date
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| fresh start reporting | A method of financial reporting applied to certain business enterprises emerging from reorganization under Chapter 11 of the Bankruptcy Code in which assets and liabilities are stated at current fair values and retained earnings deficits are written off against additional paid-in capital
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| friendly takeover | A business combination in which the boards of directors of the constituent companies generally work out the terms of the combination amicably and submit the proposal to stockholders of all constituent companies for approval
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| fully secured creditors | Creditors of a debtor in bankruptcy whose claims are collateralized by debtor's assets having current fair values in excess of the amount of the claims
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| functional currency | The currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment in which the entity primarily generates and expends cash
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| fund | In governmental and nonprofit organization accounting, a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations
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| general capital assets account group | The memorandum set of accounts of a governmental entity in which are recorded plant assets that are not in a fund
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| general devise | A decedent's gift of an amount of money or a number of countable monetary items
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| general long-term capital debt | Liabilities expected to be paid from the financial resources of governmental funds and that provide long-term financing to acquire a governmental entity's capital assets, including infrastructure, or for nonrecurring projects or activities that have long-term economic benefit
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| general long-term debt account group | The memorandum set of accounts of a governmental entity in which are recorded long-term liabilities that are not recorded in a fund
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| general obligation bonds | Bonds issued by a governmental entity that are backed by the full faith and credit of the entity and supported by its taxation power
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| general partnership | A partnership in which all the partners are responsible for unpaid liabilities of the firm and all have authority to act for the firm
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| goodwill | In general, an unidentifiable intangible asset whose cost measures the value of excess earnings of an acquired business enterprise; in a business combination, the excess of the combinor's cost over the current fair values of the combinee's identifiable net assets
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| governmental funds | The general fund, special revenue funds, capital projects funds, debt service funds, and permanent funds of a governmental entity that account for financial resources of the entity used in day-to-day operations
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| grant | A contribution of cash or other assets received by a governmental entity from another government to be used or expended for a specific purpose, activity, or facility
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| greenmail | A tactic used to resist a hostile takeover business combination in which the target combinee acquires its common stock presently owned by the prospective combinor at a price substantially in excess of the prospective combinor's cost, with the stock thus acquired placed in the treasury or retired
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| hedge | Measures taken to reduce or eliminate a potential unfavorable outcome of a future event
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| heirs | Recipients of property of an intestate decedent, as specified by state probate codes
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| highly inflationary economy | An economy having cumulative inflation of 100% or more over a three-year period
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| holographic will | A will having its essential provisions and signature in the handwriting of the testator
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| home office | The principal business unit of an enterprise that has branches or divisions
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| homestead allowance | A specified amount of a decedent's property allocated to a decedent's spouse or surviving minor or dependent children, in addition to property passing to those persons by devises
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| horizontal combination | A business combination between enterprises in the same industry
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| hostile takeover | A prospective business combination in which the target company resists the proposed takeover
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| income beneficiary | The recipient of income of a testamentary trust
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| informal probate | A proceeding by the registrar of a probate court that results in the registrar's making a decedent's will effective by means of a written statement
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| infrastructure | Streets, sidewalks, bridges, and the like of a governmental entity
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| insider trading | Purchasing or selling a security while in possession of material, nonpublic information or communicating such information in connection with a securities transaction
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| insolvent | Unable to pay liabilities when due because of insufficient assets and poor borrowing potential
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| Institute of Management Accountants (IMA) | The national professional organization of accountants in industry
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| integral theory | A theory of interim financial reporting that considers each interim period an integral part of the annual period
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| inter vivos (living) trust | A trust created by a living person
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| interest method | A technique for computing interest revenue or expense that applies the yield rate of bonds to their present value at the beginning of the period for which interest is to be measured
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| internal service funds | Proprietary funds of a governmental entity that provide supplies and services to other funds, departments, or agencies of the governmental entity on a cost-reimbursement basis
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| International Accounting Standards Board (IASB) | An organization of up to 17 members that conducts the business of the International Accounting Standards Committee
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| International Accounting Standards Committee (IASC) | An organization of accounting groups from more than 100 countries, headquartered in London, whose mission is to develop accounting standards for potential adoption in the countries of the member accounting groups
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| International Financial Reporting Standards | Pronouncements of the International Accounting Standards Board
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| intestacy | The absence of a will for a decedent
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| intestate | Without a valid will
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| investment trust funds | Fiduciary funds of a governmental agency that account for external investment pools for which the entity is the sponsoring government
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| joint venture | A partnership of limited duration and with limited projects or other activities
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| jointly controlled entity | The International Accounting Standards Board term for joint venture
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| lateral intercompany sales | Sales of merchandise by one subsidiary of a parent company to another subsidiary of that parent
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| letters testamentary | Authorization document for the personal representative of an estate to begin administration of the estate
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| life income fund | A fund established by a nonprofit organization to account for assets contributed to the organization, the income from which, in whatever amount, is distributed in periodic payments to designated recipients for a specified time period
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| limited liability company (LLC) | An entity that combines features of both partnerships (for federal income tax proposes) and corporations (for protection of owners from personal liability for entity debts)1
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| limited liability partnership (LLP) | A partnership whose partners are liable for their own actions and the actions of partnership employees under their supervision, but not for the actions of other partners; further, an LLP is responsible for the actions of all partners and employees
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| limited partnership | A partnership having, in addition to one or more general partners, one or more partners with no responsibility for unpaid liabilities of the partnership and with restrictions on activities related to the partnership
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| liquidation (of partnership) | The winding up of partnership activities, usually by selling assets, paying liabilities, and distributing any remaining cash to partners
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| loan fund | A fund typically established by a nonprofit school, college, or university for loans to students
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| local currency unit | The unit of currency of the country in which a business enterprise is located
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| London Interbank Offered Rate (LIBOR) | The international interest rate banks charge each other for loans
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| management approach | The method of operating segment designation that is based on the way a segmented business enterprise is managed
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| market risk | The risk of a decline in value or an increase in onerousness of a financial instrument or derivative instrument resulting from future changes in market prices
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| marshaling of assets | A provision of the Uniform Partnership Act that specifies the respective rights of partnership creditors and partners' personal creditors to partnership assets and to partners' personal assets
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| master limited partnership | A large limited partnership engaged in ventures such as oil and gas exploration and real estate development that issues units registered with the Securities and Exchange Commission
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| minority (noncontrolling) interest | The claim of stockholders other than the parent company to the net assets and net income or losses of a partially owned subsidiary
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| modified accrual basis of accounting | An accounting method applied to the governmental funds of a governmental entity in which revenues are recognized only when they are measurable and available
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| monetary assets | Cash and other assets representing claims expressed in a fixed monetary amount
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| monetary liabilities | Liabilities representing obligations expressed in a fixed monetary amount
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| monetary/nonmonetary method | A method of translating foreign currency financial statements in which monetary assets and monetary liabilities are translated at the current exchange rate on the balance sheet date; nonmonetary assets and liabilities and owners' equity elements are translated at historical rates. Depreciation and amortization expenses and cost of goods sold are translated at historical rates; all other revenue and expenses are translated at an average rate for the accounting period
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| monetary principle | The principle that money is assumed to be a useful standard measuring unit for reporting the effects of business transactions and events
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| multinational (transnational) enterprise | A business enterprise that carries on operations in more than one nation, through a network of branches, divisions, influenced investees, joint ventures, and subsidiaries
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| negative goodwill | The remainder of a bargain-purchase excess that cannot be apportioned to reduce the amounts assigned to the combinee's qualifying assets
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| net assets | Total assets less total liabilities; equal to stockholders' equity of a corporation
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| nonbusiness organizations | Governmental entities and nonprofit organizations
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| noncontributory pension plan | A pension plan that requires contributions from the employer but not from employees
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| noncumulative preferred stock | Preferred stock whose owners have no future claim for dividends "passed" in any year
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| nonexpendable private-purpose trust funds | Fiduciary funds of a governmental entity, of long duration, that account for the principal of a trust, which must be maintained intact
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| nonprofit organization | A legal and accounting entity that generally is operated for the benefit of society as a whole, rather than for the benefit of an individual proprietor or a group of partners or stockholders
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| notional amount | A number of currency units, shares, or other units specified in a contract supporting a derivative instrument
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| operating debt | Short-term loans obtained by the general fund of a governmental entity
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| operating expenditures | Expenditures for day-to-day operations of the governmental funds of a governmental entity, such as for salaries and wages, utilities, and consumption of short-term prepayments and inventories of supplies
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| operating segment | A component of a business enterprise that engages in business activities for which it earns revenues and incurs expenses, whose operations are regularly reviewed by the enterprise's chief operating decision maker for purposes of evaluating past performance and making decisions about future allocation of resources, and for which discrete financial information, generated by or based on the internal financial reporting system, is available
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| order for relief | Action by the Bankruptcy Court to protect the debtor from creditors' claims during the bankruptcy proceedings
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| other financing sources | Sources of financial resources of a governmental fund other than revenues, such as transfers in and gains on disposals of plant assets
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| other financing uses | Uses of financial resources of a governmental fund other than expenditures, such as transfers out and losses on disposals of plant assets
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| pac-man defense | A tactic used to resist a hostile takeover business combination in which the target company itself threatens a takeover of the prospective combinor
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| par value method | A method of accounting for the retirement of treasury stock in which the cost of the treasury stock is allocated pro rata to reduce (1) the Common Stock ledger account balance by the par or stated value, if any, of the treasury shares; (2) an appropriate additional paid-in capital account for the excess over par or stated value attributable to the original issuance of the treasury shares; and (3) Retained Earnings for any unallocated cost remaining
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| parent company | An investor enterprise that obtains control of an investee (subsidiary)
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| parent company concept | A concept of consolidated financial statements of a parent company and one or more partially owned subsidiaries that views the consolidated entity as an extension of the parent company, with the minority interest in the net assets of subsidiary considered to be a liability, and the minority interest in net income of subsidiary an expense, of the consolidated entity
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| partially secured creditors | Creditors of a debtor in bankruptcy whose claims are collateralized by debtor's assets having current fair values less than the amount of the claims
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| participating preferred stock | Preferred stock whose owners, after receiving the specified dividend on the preferred stock, may receive an additional dividend if the common stockholders are paid dividends in excess of the specified preferred dividend
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| partnership | An association of two or more persons to carry on, as co-owners, a business for profit
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| pension trust funds | Fiduciary funds of a governmental entity that account for the receipt and expenditure of amounts contributed by employer and employees to provide resources for post-retirement pensions and other such benefits to former employees
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| performance budget | An annual budget of a governmental entity's general fund that attempts to relate the input of governmental resources to the output of governmental services
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| periodic inventory system | The method of accounting for inventory in which the Inventories ledger account is used only at the end of an accounting period to reflect the value of the ending inventory of merchandise or manufactured products
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| permanent difference | A difference between pretax financial income and taxable income that does not reverse in one or more subsequent accounting periods
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| permanent endowment fund | An endowment fund whose principal never may be disbursed by the nonprofit organization
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| permanent funds | Governmental funds that account for resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the governmental entity's programs
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| perpetual inventory system | The method of accounting for inventory in which the Inventories ledger account is debited for purchases of merchandise or the cost of goods manufactured and credited for the cost of goods sold
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| personal representative | The executor or administrator of a decedent's estate
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| plant fund | A fund of a nonprofit organization that accounts for plant assets, and often for cash and investments earmarked for additions to plant assets as well as mortgage notes payable and other liabilities collateralized by the organization's plant assets
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| pledge | A commitment by a prospective donor to contribute a specific amount of cash or property to a nonprofit organization on a future date or in installments
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| pledgor | The maker of a pledge
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| poison pill | A tactic used to resist a hostile takeover business combination in which the target company amends its articles of incorporation or bylaws to make it more difficult to obtain stockholder approval for a takeover
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| preacquisition contingencies | Contingent assets (other than potential income tax benefits of a loss carryforward), contingent liabilities, or contingent impairments of assets that existed prior to completion of a business combination
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| preference | The transfer of cash or property to a creditor by an insolvent debtor within 90 days of the filing of a bankruptcy petition by or on behalf of the debtor, provided that the transfer caused the creditor to receive more cash or property than would be received in the bankruptcy liquidation
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| primary government | A state government, a municipality or county, or a special-purpose government such as a school district or a park district meeting specified criteria
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| principal beneficiary (remainderman) | The recipient of the principal of a trust
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| prior period adjustment | In a statement of partners' capital, an adjustment to partners' beginning capital balances to correct an error in the financial statements of a prior period
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| private-purpose trust funds | Fiduciary funds of a governmental entity that account for trust arrangements under which principal and income benefit individuals, private organizations, or other governments
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| probate | Action by the probate court to validate a decedent's will
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| probate (orphan's, surrogate) court | The state court established to probate decedents' wills
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| professional corporation | A form of corporation authorized by some states, having various requirements as to professional licensing of stockholders, transfers of stock ownership, and malpractice insurance coverage
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| program services | Activities of a nonprofit organization that result in the distribution of goods and services to beneficiaries, customers, or members that fulfill the purposes or mission of the organization
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| projected benefits | The amount of all benefits under a defined benefit pension plant attributable to employee services to the date of computation of the actuarial present value
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| promissory note | An unconditional promise in writing, signed by the maker, to pay a certain sum of money on demand or at a fixed or determinable future time to order of a payee or to bearer
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| proportionate consolidation method | The International Accounting Standards Board term for the proportionate share method of accounting for an investment in a joint venture
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| proportionate share method | The method of accounting for an investment in an unincorporated joint venture that allocates to the venturer's assets, liabilities, revenue, gains, expenses, and losses the venturer's pro rata share of the venture's comparable items
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| proprietary funds | Enterprise funds and internal services funds of a governmental entity that carry out governmental activities closely resembling the operations of a business enterprise
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| proxy statement | A statement filed by a publicly owned company with the SEC prior to the company's solicitation of proxies from stockholders prior to a meeting of stockholders
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| Public Company Accounting Oversight Board | An organization established under the Sarbanes-Oxley Act of 2002 to oversee financial reporting of publicly owned business enterprises and their independent auditors
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| push-down accounting | Accounting for net assets of a subsidiary at their current fair values as established in the business combination, rather than at carrying amounts, in separate financial statements of the subsidiary
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| quasi-endowment fund | An endowment fund established by the governing board of a nonprofit organization, the principal of which may be expended at the direction of the board
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| quasi-external transactions | Transactions of the general fund of a governmental entity with proprietary funds of the entity, such as for goods and services provided by the proprietary funds
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| realization | Conversion of noncash assets of a liquidating partnership or debtor in bankruptcy to cash
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| reciprocal accounts | The Investment in Branch ledger account in the home office accounting records and the Home Office account in the branch accounting records; also, the Investment in Subsidiary Common Stock ledger account in the parent company's accounting records and the stockholders' equity accounts in the subsidiary's accounting records
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| registrar | The officer of a probate court authorized to carry out informal probate of decedents' wills
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| registration statement | A document filed with the SEC by a company that issues securities to the public interstate
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| Regulation S-K | A pronouncement of the SEC that provides guidance for the completion of nonfinancial statement disclosure requirements in the various Forms filed with the SEC
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| Regulation S-X | A pronouncement of the SEC that provides guidance on the form and content of financial statements included in the various Forms filed with the SEC
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| remeasurement | Restatement of account balances of a foreign entity to its functional currency from its local currency
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| reorganization value | The current fair value of the total assets of a business enterprise undergoing reorganization under Chapter 11 of the Bankruptcy Code
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| reportable segments | Operating segments of a business enterprise for which numerous disclosures are required by the Financial Accounting Standards Board
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| reporting currency | The currency of the parent company, home office, or investor enterprise of a foreign entity
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| residuary devise | A devise of all property of a decedent remaining after specific and general devises are distributed
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| restricted fund | A fund established by a nonprofit organization to account for contributed assets available for current use but expendable only as authorized by the donor of the assets
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| revenue bonds | Bonds issued by an enterprise fund of a governmental entity to finance a construction project of the entity; the bonds' principal and interest are paid from revenues generated by the construction project
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| Revised Uniform Principal and Income Act | A law in effect in part or in full in many states, which provides for allocation of transactions of the personal representative of an estate or trust between principal and income, in the absence of appropriate instructions in the will or trust document
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| right of offset | A legal doctrine that permits offsetting of a loan receivable from or payable to a partner of a liquidating partnership against that partner's capital account balance
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| sales-type lease | A lease that, from the viewpoint of the lessor, is equivalent to the sale, rather than the rental, of property to the lessee
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| Sarbanes-Oxley Act of 2002 | A federal law enacted to reform financial reporting by publicly owned business enterprises and their independent auditors
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| scorched earth | A tactic used to resist a hostile takeover business combination in which the target company sells or spins off to stockholders one or more profitable business segments
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| Securities and Exchange Commission (SEC) | The federal agency charged with overseeing issuance and trading of securities interstate by publicly owned companies
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| security interest | A legal claim of a secured creditor of a debtor to designated personal property of the debtor
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| selling spot rate | The exchange rate charged by a foreign currency dealer "on the spot"
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| settlor (donor, trustor) | The creator of a trust
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| shared revenues | Revenues received by a governmental entity from another government that had levied the taxes or fees to be shared
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| shark repellent | A tactic used to resist a hostile takeover business combination in which the target company acquires substantial amounts of its outstanding common stock for the treasury or for retirement or incurs substantial long-term debt in exchange for its outstanding common stock
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| special assessment bonds | Bonds issued by a governmental entity, principal and interest of which are paid from special assessments on specific taxpayers benefited by the construction project financed in part by the bonds
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| special assessments | Taxes levied by a governmental entity on specific taxpayers to be benefited by the construction project financed in part by the assessments
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| special purpose entities | Entities created for a limited purpose, with a limited life and limited activities, and designed to benefit a single company
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| special revenue funds | Governmental funds that account for receipts and expenditures associated with specialized revenue sources that are earmarked by law or regulation to finance specified government operations
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| specific devise | A decedent's gift of identified objects, such as named paintings, automobiles, stock certificates, or real property
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| sponsoring government | A governmental entity that manages external investment pools
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| spot rate | The rate of exchange between two foreign currencies to be exchanged "on the spot"
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| Staff Accounting Bulletins (SABs) | Pronouncements of the SEC staff regarding administrative interpretations and practices used by the staff in reviewing Forms and financial statements filed with the SEC
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| statement of activities | A financial statement that displays the changes in net assets—unrestricted, temporarily restricted, and permanently restricted—of a nonprofit organization
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| statement of affairs (financial statement) | A "quitting concern" financial statement prepared on behalf of a debtor undergoing bankruptcy liquidation that classifies nonexempt assets and liabilities of the debtor according to provisions of the Bankruptcy Code
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| statement of cash flows | A financial statement that displays the cash flows from operating activities, investing activities, and financing activities of a business enterprise, governmental entity, or nonprofit organization
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| statement of financial affairs (legal document) | A document accompanying a debtor's petition that contains a series of questions concerning all aspects of the debtor's financial position and operations
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| statement of financial position | A financial statement that displays the assets, liabilities, and net assets—permanently restricted, temporarily restricted, and unrestricted—of a nonprofit organization
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| statement of partners' capital | The financial statement issued by a partnership to display changes in partners' capital from investments, net income or loss, and drawings during an accounting period
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| statement of realization and liquidation | A financial statement prepared for a liquidating partnership that displays realization of noncash assets, allocation of resultant gains or losses to partners, payment of partnership liabilities, and distribution of any remaining cash to partners; also, a financial statement prepared on behalf of a trustee in a bankruptcy liquidation that sets forth assets realized and liabilities paid, with "gains" and "losses" thereon applied to the estate deficit
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| statutory consolidation | A business combination in which a new corporation issues common stock for all outstanding common stock of two or more other corporations that are then dissolved and liquidated, with their net assets owned by the new corporation
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| statutory merger | A business combination in which one corporation (the survivor) acquires all the outstanding common stock of one or more other corporations that are then dissolved and liquidated, with their net assets owned by the survivor
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| subsidiary | An investee enterprise controlled by an investor enterprise (parent company)
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| support | Resources obtained by nonprofit organizations through contributions from individuals, governmental entities, and other organizations
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| supporting services | All activities of a nonprofit organization other than program services, such as management and general, fund-raising, and membership development activities
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| survivor | The constituent company in a statutory merger that is not dissolved and liquidated
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| temporary difference | A difference between the tax basis of an asset or a liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively; a difference between pretax financial income and taxable income that reverses in one or more subsequent accounting periods
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| term endowment fund | An endowment fund whose principal may be expended after a specified time period or the occurrence of a specified event
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| testamentary trust | A trust created by a will
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| testator | The maker of a will
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| third-party payor | An organization such as Medicare or Medicaid that pays for services rendered by a nonprofit hospital to patients
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| transfers | Transfers of financial resources among funds of a governmental entity for other than quasi-external transactions
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| translation | Restatement of financial statement amounts of a foreign entity from its functional currency to the reporting currency of the parent company or investor enterprise
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| trust document | The document establishing a trust
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| trust indenture | The legal document that creates a trust
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| trustee | The fiduciary individual or corporation holding title to trust property and carrying out provisions of the trust document
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| underlying | A specified interest rate, security price, foreign exchange rate, index of prices or rates, or other variable; it may be a price or rate of an asset or liability but not the asset or liability itself
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| undistributed earnings of subsidiary | The parent company's share, under the equity method of accounting, of the adjusted net income less dividends of the subsidiary
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| Uniform Probate Code | A law in effect in part or in full in many states, which provides for procedures used in probating wills
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| uniting of interests | The International Accounting Standards Board formerly used term for a business combination not construed as a purchase of the combinee by the combiner
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| units | Securities evidencing ownership interests in a limited partnership
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| unrelated business income | Income derived by a nonprofit organization from activities not substantially related to the educational, charitable, or other basis of the organization's tax-exempt status
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| unrestricted fund | A nonprofit organization's fund that includes all assets of the organization available for use as authorized by the governing board and not restricted for specific purposes
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| unsecured creditors with priority | Creditors of a debtor in a bankruptcy proceeding whose unsecured claims are paid in accordance with provisions of the Bankruptcy Code prior to the payment of claims of other unsecured creditors
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| unsecured creditors without priority | Creditors of a debtor in a bankruptcy proceeding whose unsecured claims do not have priority under the Bankruptcy Code
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| upstream intercompany sales | Sales of merchandise by a subsidiary to its parent company
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| variable interest entity | An entity subject to consolidation with a parent company under terms of an Interpretation of the Financial Accounting Standards Board
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| vertical combination | A business combination between an enterprise and its customers or suppliers
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| white knight | A tactic used to resist a hostile takeover business combination in which the target company seeks out a candidate to be the combinor in a friendly takeover
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| will | A document that awards a testator's property to devisees following the testator's death
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