A permanent fund of property or money bestowed upon an institution or a person, the income from which is used to serve the specific purpose for which the gift was intended.
An Endowment Contract is an agreement with an insurance company which provides for a payout especially based on the life expectancy of the insured, and might be payable in full in a single payment during their lifetime.
Energy cost refers to the expenditure on all sources of energy required by an organization, including electricity, gas, solid fuels, oil, and steam. Managing energy costs effectively can significantly impact an organization's bottom line and sustainability goals.
The science of managing energy productivity effectively, stemming from an effort to optimize energy use and systems, especially in response to the oil embargo in the 1970s.
An engagement letter, commonly referred to as a letter of engagement, is a document used by auditors to delineate clearly the scope of their responsibilities in an audit engagement. It serves as the written confirmation of the auditors' acceptance of the appointment, the scope of the audit, the form of the report, and includes any non-audit services to be rendered.
Engel's Law is an economic principle formulated by 19th-century economist Ernst Engel, stating that as a family's income increases, the proportion of income spent on food decreases, even if absolute spending on food rises.
Engineered capacity refers to the maximum output that a system, facility, or entity can achieve when it is designed and operated under optimal conditions. It takes into account the inherent abilities of the system as well as external factors like technological improvements, management practices, and resource availability.
Engineered costs involve calculating expected expenditures for a production process by constructing synthetic costs based on detailed analysis and logical considerations. This method is often used in standard costing, budgeting, and planning where estimated unit costs are necessary before production.
Enjoin refers to the act of legally prohibiting or requiring an action through a judicial order, often associated with court-issued injunctions.
An Enrolled Actuary is a professional actuary accepted by the Internal Revenue Service (IRS), whose signature is required for IRS Form 5500 to demonstrate the tax compliance of a pension plan.
An enrolled agent (EA) is a tax advisor who is authorized to represent taxpayers before the IRS. EAs have demonstrated their competence in tax matters by passing a rigorous examination or through significant professional experience with the IRS.
Enrolled Agents (EAs) in the United States are individuals recognized by the Treasury Department as credentialed tax professionals who are authorized to represent taxpayers before the Internal Revenue Service (IRS).
The period immediately following employment during which one may sign up for insurance coverage. If an employee decides later to secure coverage, he or she must wait for a period of time or for an open enrollment period.
The Enron scandal is a complex case of fraudulent accounting that led to the collapse of the energy giant Enron in 2001, one of the largest corporate bankruptcies in U.S. history, which subsequently led to significant legislative changes.
An enterprise refers to a business firm or company, often applied to a newly formed venture. It is an organization engaged in commercial, industrial, or professional activities with the primary objective of earning profit.
Enterprise Application Integration (EAI) is the process of enabling different business software applications to work together, ensuring smooth interoperability and enhancing system compatibility across an enterprise's IT infrastructure.
A UK government scheme designed to encourage bank lending to smaller enterprises by providing a 75% guarantee on company overdrafts, while the borrower remains liable for 100% of the loan amount. It is available to UK companies with a turnover of no more than £41M.
An Enterprise Fund is a government-owned organization that provides goods or services to the public for a fee, making the organization self-supporting.
The Enterprise Investment Scheme (EIS) is a UK government initiative designed to help smaller, higher-risk companies raise finance by offering tax relief to investors who purchase new shares in those companies.
An investment scheme in the UK that replaced the Business Expansion Scheme (BES) on 1 January 1994. It helps small higher-risk unlisted trading companies raise capital by offering tax relief to investors.
Enterprise Management Incentives (EMIs) are a type of employee stock option scheme that provides tax advantages to both employees and employers in the United Kingdom.
An approved share option scheme designed to help small high-risk unlisted companies attract and retain key employees.
Enterprise Performance Management (EPM) is a framework used by organizations to monitor and manage their performance against key business objectives. It encompasses strategies, tools, and processes that provide comprehensive insights into business performance.
Enterprise Performance Management (EPM) refers to the process-based framework and software modules that help businesses manage and improve performance through analysis, planning, monitoring, and control mechanisms. Specifically, EPM encompasses budgeting, forecasting, financial reporting, and scorecarding techniques.
Enterprise Resource Planning (ERP) software systems are designed to assist in the management of various business operations, including product planning, parts purchasing, inventory maintenance, supplier interactions, customer service, and order tracking. These systems are typically integrated with a central database.
A comprehensive metric frequently used to measure the value of a business in its entirety, incorporating both equity and debt.
Entertainment expenses and business meals are deductible only if they are 'directly related to' or 'associated with' the active conduct of a taxpayer's trade or business. These expenses are deductible to the extent of 50% of cost, excluding any lavish or extravagant costs.
A government program that requires payment to anyone who meets specific qualifications, ensuring those who qualify are entitled to the payments. Examples include Social Security, Medicare, and food stamps.
The Entity View is a fundamental concept in accounting that emphasizes the importance of the business or organization as a separate entity from its owners. This view is based on the accounting equation where the sum of the assets is equal to the claims on these assets by owners and others.
An entrepreneur is an individual who initiates business activity, often taking significant financial risks with the hope of profits.
Entrepreneurial profit refers to the compensation for the expertise and successful effort of a skilled businessperson, encompassing the portion of profit exceeding the normal profit for typically competent management.
Entrepreneurs' Relief (ER) is a tax relief scheme introduced on April 6, 2008, in the UK, offering a reduced rate of Capital Gains Tax (CGT) on disposals of qualifying business assets, effectively encouraging entrepreneurial activities.
An entry is a record made in a book of account, register, or computer file of a financial transaction, event, proceeding, etc. Entries are fundamental in the accounting process, ensuring that all financial activities are accurately recorded and tracked.
The current replacement cost of an asset, often used in current-value accounting, and compared to exit value.
An entry-level job is a job which an individual having little or no experience takes in an organization to begin pursuing a career. These jobs often provide foundational knowledge and skills to help individuals advance in their careers.
Environmental Accounting (EA) is a subset of accounting that focuses on the efficient use, management, and reporting of resources used by businesses to reduce environmental impacts. EA includes identifying, measuring, and communicating the costs of a company's economic activities associated with the environment.
Environmental Assessment (EA) is a critical process designed to analyze the ecological consequences of proposed land development activities, including factors such as endangered species, hazardous waste, and historical significance. The findings determine whether an Environmental Impact Statement (EIS) is warranted.
An environmental audit, also known as a green audit, assesses the impact of an organization's activities on the environment. Its goal is to ensure an organization’s operations comply with environmental policies, and recommendations for sustainability are regularly reviewed. Such audits can be internal or conducted by external consultants.
Comprehensive overview of the various categories of environmental costs and their implications for businesses in ensuring environmental stewardship.
An analysis of the expected effects of a development or action on the surrounding natural and fabricated environment. Required for many federally supported developments under the National Environmental Policy Act of 1969.
The Environmental Protection Agency (EPA) is a federal government agency tasked with the mission of protecting human health and the environment. Its duties include research and monitoring, setting standards for air and water quality, and regulating the use of pesticides and other hazardous materials.
An Environmental Site Assessment (ESA) is an evaluation of a property to determine the presence or absence of environmental contamination, ensuring compliance with environmental regulations and safeguarding public health.
EOM Dating refers to a specific arrangement in payment terms where all purchases made through a specific day of one month are payable within a set period after the end of the following month.
EONIA serves as the overnight reference rate for the eurozone interbank market, reflecting the weighted average of all overnight unsecured lending transactions in the interbank market as reported by a panel of contributing banks.
Equal and uniform taxation is a principle stipulating that all persons of the same class must be treated equally in terms of taxation, ensuring that the same rate and value apply to similar properties being taxed.
The Equal Credit Opportunity Act (ECOA) is a federal law passed in the mid-1970s aiming to prevent discrimination in the granting of credit based on various personal attributes and financial circumstances.
The Equal Employment Opportunity Commission (EEOC) is a federal agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee due to race, color, religion, sex (including pregnancy, transgender status, and sexual orientation), national origin, age (40 or older), disability, or genetic information.
An Equal Opportunity Employer is committed to providing egalitarian practices in hiring, promotion, and other employment practices by assessing applicants and employees without discrimination.
A constitutional guarantee embodied in the Fourteenth Amendment to the U.S. Constitution ensuring that no state shall deny any person within its jurisdiction the equal protection of the laws.
The Equal Rights Amendment (ERA) is a proposed constitutional amendment designed to guarantee that sex not be the basis for any legal decisions or distinctions. Despite not being ratified by a sufficient number of states to become a constitutional amendment, the principles of the ERA have influenced numerous statutes and judicial rulings.
Equal-Instalment Depreciation, also known as the straight-line method, is a simple and commonly used depreciation method where an asset's cost is evenly spread over its useful life.
An Equalization Board is a government agency that determines the fairness of taxes levied against property. It ensures that all counties within a state assess property at a uniform rate for equitable state-level redistribution.
Equilibrium refers to the status of a market in which there are no forces operating that would automatically set in motion changes in the quantity demanded or the price that currently prevails.
The equilibrium price is the price at which the quantity of goods producers wish to supply matches the quantity demanders want to purchase.
The equilibrium quantity is the amount of a good that will be produced and sold when the market for the good is in equilibrium, where demand equals supply.
Machines or major tools necessary to complete a given task. Equipment must be capitalized and written off over the appropriate depreciable life.
Equipment leasing involves acquiring tangible assets such as computers, railroad cars, and airplanes, and then leasing them to businesses in exchange for lease payments and potential tax benefits like depreciation deductions.
An Equipment Trust Bond (ETB), also known as an Equipment Trust Certificate, is a type of bond issued primarily by transportation companies to finance the purchase of new equipment. Importantly, the bondholder has the first right to claim the equipment if the issuer defaults on interest and principal payments.
An Equipment Trust Certificate (ETC) is a financial instrument used in the USA to document loans intended for the purchase of major equipment. The certificate holder has a secured interest in the asset, akin to a mortgage, commonly seen in industries like airlines and shipping.
An Equipment Trust Certificate (ETC) is a debt instrument that allows transportation companies to finance the acquisition of equipment such as aircraft, ships, and railroad cars. These instruments are backed by the equipment itself, providing security for the lender and financing terms favorable to the borrower.
Equitable refers to actions, processes, or outcomes that are marked by fair and impartial treatment, and which conform to principles of natural justice rather than strictly to technical legal rules.
Equitable apportionment refers to the process of sharing common costs between different cost centres in a fair and just manner. This is done using a basis of apportionment that accurately reflects how the costs are incurred by each cost centre.
Equitable distribution refers to the fair division of property among interested persons, most commonly observed during divorce proceedings or the settlement of estates.
An equitable owner is the beneficiary of property held in trust, enjoying the benefits of ownership without holding legal title.
Equitable title represents the interest held by a prospective buyer who has agreed to purchase a property but has not yet completed the transaction.
Equity represents a beneficial interest in an asset, net asset value, or shareholders' interest in a company. It is a critical component in personal finance, corporate finance, and accounting.
Equity accounting refers to a method of accounting whereby a company reports a proportionate share of the undistributed profits and net assets of another company in which it holds a share of the equity.
Equity Buildup refers to the gradual increase in an owner's equity in mortgaged property, primarily caused by the amortization of the loan principal.
An equity carve-out is a type of corporate restructuring process that involves a parent company selling a minority share of a subsidiary to the public through an initial public offering (IPO). This allows the parent company to raise capital while maintaining control over the subsidiary.
Equity dilution refers to the reduction in the percentage ownership of a shareholder as a result of a new issuance of shares within a company, which rank equally with the existing voting shares.
A financial ratio indicating the ability of a company to pay dividends to its ordinary shareholders out of its distributable profits. A higher ratio suggests stronger dividend-paying capacity and financial health.
Equity finance involves raising capital through the sales of shares, where shareholders earn ownership in the company and potentially receive dividends based on company profits.
Equity financing involves raising capital through the sale of shares in a company, providing stakeholders with ownership interests in contrast to accruing debt.
A financial metric that shows the ratio of a company's equity to its debt, providing insights into how a company finances its operations and growth.
An equity instrument is any financial instrument that signifies ownership interest in an entity, such as stocks, options, or warrants.
An equity kicker, or simply a 'kicker,' is a financial term used to describe an added benefit for investors, often taking the form of equity participation in a company, offered as an incentive to sweeten a debt transaction.
The equity method is an accounting technique used to record investments in associated undertakings, reflecting the investor's share of the investee's net assets and performance.
The Equity of Redemption is a legal right of mortgagors to reclaim their property after defaulting, by settling the entire mortgage debt including costs and interest before foreclosure occurs.
An Equity Real Estate Investment Trust (REIT) that invests directly in properties and earns income from their ownership and operation.
An equity share, also known as an ordinary share, represents an ownership interest in a company, granting the holder voting rights, dividends, and a claim on assets upon liquidation.
Equity Share Capital refers to the portion of a company's capital that is raised in exchange for shares, representing ownership stakes in the company. This differs from non-equity shares which may include debt or preferred stock.
The Equity Yield Rate measures the rate of return on the equity portion of an investment, accounting for periodic cash flow and proceeds from resale, but excluding income taxes.
Equivalent Taxable Yield is a comparison of the taxable yield on a corporate bond with the tax-free yield on a municipal bond. Depending on the tax bracket, an investor's after-tax return may be greater with a municipal bond than with a corporate bond offering a higher interest rate.
A detailed overview of equivalent units, explaining how unfinished units of production at the end of a period are measured and valued.
Ergonomics is the scientific discipline concerned with understanding interactions among humans and other elements of a work system, and the profession that applies theoretical principles, data, and methods to design in order to optimize human well-being and overall system performance.
Ernst & Young (EY) is a multinational professional services firm providing advisory, assurance, tax, and transaction advisory services. EY is recognized as one of the 'Big Four' accounting firms globally.
Erosion refers to the gradual wearing away of land through natural processes such as streams and wind. Additionally, in a business context, 'erosion' describes the gradual decline in elements like sales and market share.
An 'error' can refer to a variety of mistakes or misjudgments across multiple fields, including general actions, legal proceedings, computer systems, and statistical analysis. Understanding the context in which an error occurs is crucial for addressing and mitigating its effects.
A formal claim made by a taxpayer due to an overpayment of tax, often resulting from an error or mistake in a tax return or statement. Must be filed within six years.
Errors and Omissions (E&O) Liability Insurance is a type of professional liability insurance that protects professionals and companies from claims of negligence or inadequate work.
An escalator clause is a provision in a contract that allows for an increase in agreed-upon costs or payments based on specific conditions, often related to inflation or other economic factors.
An escalator clause is a provision in a contract that allows for cost increases to be passed on to one of the parties involved. This is typically seen in contracts such as employment agreements and leases.
An escape clause is a provision in a contract that allows one or more of the parties to cancel all or part of the contract if certain events or situations do or do not occur.
Escheat is a legal doctrine that transfers the property of a person who dies without a will and has no legal heirs to the state.
A comprehensive guide to understanding Escrow, its mechanism, and relevance in various fields such as real estate, finance, and more.
An escrow account is a financial arrangement where a third party holds and regulates payment of funds required for two parties involved in a transaction. In real estate, it typically manages property tax, homeowner's insurance, and mortgage insurance payments.
An escrow agent is a neutral third party responsible for holding and managing funds or assets until predetermined contractual conditions are met, commonly used in real estate transactions.
Escrow Closing is a term used to signify the finalization of real estate transactions, particularly in states where deeds of trust are used in place of traditional mortgages. This process involves an escrow agent ensuring that all documents and funds are properly managed and disbursed.
Espionage is the act of spying or using spies to gather information about the activities of a target, often involving illicit or covert operations. This includes both governmental and corporate levels, where gathering confidential or proprietary information can lead to significant advantages or disadvantages.
The title 'Esquire' (abbreviated as 'Esq.') is used by lawyers in the United States as an alternative honorific preceding an individual's name, e.g., 'Allen Seegull, Esq.' instead of 'Mr. Allen Seegull.'
