A foreign company, or overseas company, is a company incorporated outside the UK but has a subsidiary or established place of business within the UK. These companies are subject to provisions of the Companies Act 2006 relating to registration, accounts, constitution, directors, name, etc.
A foreign corporation is a legal entity that is registered outside the state or country in which it primarily conducts business. It is important to distinguish between out-of-state corporations and alien corporations.
The Foreign Corrupt Practices Act (FCPA) is a United States legislation enacted in 1977 designed to prevent bribery and corruption by U.S. companies in their overseas operations. A 1998 amendment extended its scope to include actions by foreign citizens and companies while on U.S. territory.
The Foreign Corrupt Practices Act (FCPA) is a United States law enacted in 1977 aimed at preventing the bribery of foreign officials to obtain or retain business. It mandates accounting transparency requirements and imposes internal controls and disclosure requirements.
Foreign currency refers to the currency of another country, which is not used in the preparation of an organization’s domestic accounts. This term is important in financial reporting for organizations with international transactions or operations.
A mechanism whereby an exchange rate can be calculated between two currencies for which no direct rate of exchange exists. The US dollar, which is customarily used as the vehicle currency in foreign-exchange trading, functions as the common denominator for such calculations.
Foreign Currency Translation is the process of expressing amounts denominated in one currency in terms of another currency using the exchange rate between the currencies. Assets and liabilities are translated at the current exchange rate as of the balance sheet date, while income statement items are typically translated at the weighted-average exchange rate for the period.
Foreign Direct Investment (FDI) refers to the investment made by a foreign entity into a business or production in another country. This often involves acquiring control or significant ownership of a company in the target country.
Foreign emoluments refer to earnings received by a person domiciled outside the UK from employment with a non-resident employer.
An in-depth look at the foreign exchange market, commonly known as FOREX or FX, where currencies are traded.
A highly liquid global marketplace for currency trading. The foreign exchange market includes both the spot market for immediate transactions and the forward market for future transactions.
A foreign exchange rate is the price of a nation's currency in units of another currency, indicating how much one currency is worth in terms of another.
Foreign income refers to any income that is generated from sources outside the United States. It is important for individuals and businesses, particularly those with international investments and operations, to understand the various regulations and tax implications associated with foreign income.
Foreign investment refers to the investments made by citizens or governments of one country into the industries of another country, including investments within a country by foreigners. The income tax treatment of foreign investment income is often governed by tax treaties between the country of the investment owner and the country where the investment is located.
The Foreign Tax Credit (FTC) is a credit allowed against U.S. income taxes for foreign taxes paid on income earned overseas. It helps to mitigate the double taxation of income that is taxable both in the U.S. and by a foreign country.
The Foreign Tax Deduction allows individuals to deduct foreign income taxes paid or accrued from their U.S. income tax, or alternatively, apply the taxes as a credit against U.S. income tax liabilities.
The Foreign Trade Multiplier is a concept in economics that measures the increase in a country's GDP due to efficiencies and interconnections of foreign trade activities. It demonstrates how trade can amplify economic growth by leveraging the comprehensive benefits of exporting and importing.
A Foreign Trade Zone (FTZ) is a designated, enclosed area near a port where goods can be stored, inspected, packaged, or undergo other processes without the assessment of duties or customs fees.
A foreign-exchange dealer is an individual or entity engaged in the buying and selling of foreign currency, often working at a commercial bank or financial institution. Their role includes executing currency trades on behalf of clients, managing foreign exchange risks, and sometimes speculating on future currency movements.
A forensic accountant is a professional who applies accounting principles, theories, and discipline to uncover facts and hypotheses relevant to legal disputes. They integrate investigative and accounting skills to analyze financial statements and numbers.
Forensic accounting involves using accounting, auditing, and investigative skills to conduct an examination of a company's financial statements for use in legal proceedings or to uncover fraud.
Forfaiting is a form of debt discounting for exporters in which a forfaiter accepts at a discount, and without recourse, a promissory note, bill of exchange, letter of credit, etc., received from a foreign buyer by an exporter. This enables exporters to receive payment without risk at the cost of a discount.
The losses or additional charges imposed on an individual or entity for failing to meet specific obligations or conditions in a financial or contractual agreement.
In the context of a pension or a profit-sharing plan, forfeitable benefits are those in which a participant has no ownership rights until specific length-of-service or performance requirements for vesting have been met.
A partly paid share in a company that the shareholder must forfeit due to failure to pay a subsequent or final payment. Such shares must either be sold or canceled by a public company, whereas a private company is not regulated in this respect.
Forfeiture refers to the permanent loss of property for failure to comply with the law, resulting in the divestiture of the title of property, without compensation, for a default or an offense.
The legal offence of making a false instrument intending it to be accepted as genuine, causing harm to others. Under the Forgery and Counterfeiting Act 1981, an instrument may be a document or device on which information is recorded.
Form 10-K is a comprehensive report filed annually with the Securities and Exchange Commission (SEC) by publicly traded companies in the United States. It includes audited financial statements and additional detailed information that generally exceeds the data offered in the annual report to stockholders.
Form 10-Q is a quarterly report required by the U.S. Securities and Exchange Commission (SEC) that gives a comprehensive overview of the company’s financial performance during the quarter.
An overview of the various forms used for individual U.S. income tax returns, including Form 1040, 1040A, and 1040EZ, their specific requirements, and use cases.
A U.S. tax form used by partnerships and joint ventures for reporting income, deductions, gains, losses, and informational items.
U.S. tax form used by payers to report various types of income other than wages, salaries, and tips. Examples include interest, dividends, royalties, capital gains, and miscellaneous income.
U.S. corporate income tax return, generally required to be filed by March 15 of each year.
Form 20-F is the required Securities and Exchange Commission (SEC) form for non-US companies to file annual results, ensuring transparency and compliance with US regulations.
Form 8-K is a report filed by publicly traded companies with the Securities and Exchange Commission (SEC) to announce significant corporate events that shareholders and the SEC should know about.
Form Utility refers to the enhancement of a product's marketability through changes to its physical characteristics, making it more useful to consumers.
The method of presenting financial statements chosen by an organization. Incorporated bodies must use the formats prescribed by relevant legislative and regulatory frameworks, such as the Companies Act, for their balance sheet and profit and loss account.
Formation expenses pertain to the costs incurred in establishing a company. As mandated by the Companies Act, they should not be recorded as an asset of the company.
A former buyer is a customer who has not made any additional purchases within a specified period of time, typically a year. Former buyers are generally better prospects for additional sales than non-buyers because they have shown a willingness and ability to buy.
Formula investing is an investment technique grounded in a predetermined timing or asset allocation model that eliminates emotional decisions from the investment process. By following a systematic, rule-based strategy, formula investing aims to mitigate the influence of market sentiment and human emotions in making investment decisions. The approach often involves specific triggers or conditions under which investments are adjusted, rebalanced, or reallocated.
FORTRAN (Formula Translation) is a high-level computer programming language developed by IBM in the late 1950s. It was the first programming language that allowed programmers to express calculations through mathematical formulas.
A fortuitous loss is a loss occurring by accident or chance, not by anyone's intention, and is covered under insurance policies that provide protection against unpredictable, uncontrollable events.
An annual listing by Fortune magazine of the 500 largest U.S. industrial (manufacturing) corporations, including both manufacturing and nonmanufacturing companies.
An online discussion platform where peers can exchange ideas, seek support, and collaborate on specific subjects. These forums are often hosted by organizations or service providers to foster community interaction and problem-solving.
Forward buying is a retail practice of purchasing more inventory than immediately needed to take advantage of special discounts or trade allowances, thereby aiming to increase profits.
A forward contract involves the actual purchase or sale of a specified quantity of a commodity, government security, foreign currency, or other financial instrument at a price agreed upon now, with delivery and settlement at a future specified date.
Forward dealing involves transactions in commodities, securities, currencies, freight, etc., for future delivery at a price agreed upon at the time the contract is made. This type of trading enables dealers and manufacturers to hedge future requirements.
The forward differential, often linked to forward points, is a crucial concept in foreign exchange (FX) markets, influencing currency forward contracts pricing.
The rate of interest that will apply to a loan or deposit beginning on a future date and maturing on a second future date. It is a crucial concept in financial markets for managing interest rate risk.
In the context of shipping, 'forward' refers to the act of sending a package or goods from one location to another. This often involves redirecting items to a new address when the original address is not suitable for delivery.
Forward integration is a type of vertical integration strategy employed by companies to gain control over the direct distribution or supply chain of their products.
Forward margin, also referred to as forward points, is an essential concept in the foreign exchange market, reflecting the difference between the spot rate and the forward rate for a currency pair.
Forward P/E is a valuation measure used by investors to gauge the price of a company's stock relative to its expected earnings per share over the next 12 months.
The amount to be added to or deducted from the spot foreign-exchange rate to calculate the forward exchange rate.
Forward pricing is a method of pricing used by open-end investment companies, where the share price is determined by the net asset value (NAV) of the outstanding shares, and all incoming buy and sell orders are based on the next NAV calculation.
Forward stock refers to the merchandise carried in the selling areas of a retail store that is not accessible to the patrons, for items that require protection or controlled access, such as perfume, jewelry, and cameras.
A forward-exchange market is a segment of the foreign-exchange market where currencies are traded for delivery at a specific date in the future. This market is used to hedge against the risk of currency fluctuations.
Forward-looking statements in annual reports and other financial communications are based on management's forward-thinking perspectives, subject to assumptions, estimates, and projections. They aim to provide insights under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, emphasizing that actual outcomes may differ materially.
A forward-rate agreement (FRA) is a contractual agreement between two parties that determines the rate of interest to be paid/ranked on a future loan or deposit. This financial instrument allows parties to lock in interest rates for future transactions, providing a hedge against interest rate fluctuations.
A forwarding company, also known as a freight forwarder, is a business entity that arranges the shipment of goods on behalf of individuals or companies. They handle the logistics of transporting goods, including documentation and customs clearance.
A Foul Bill of Lading is a document issued by a carrier indicating that the goods being shipped were found to be damaged or short in quantity upon loading.
The shares issued to the founders of a company, often carrying special dividend rights and voting rights, offering an incentive for sustained involvement and control by the original founders.
The Four Ps of Marketing represent the essential components of a successful marketing strategy: Product, Price, Place, and Promotion. Developed by E. Jerome McCarthy, these elements help businesses address choices about what products or services to produce, pricing strategies, distribution channels, and promotional tactics.
The Fourth Company Law Directive, also known as the Fourth Accounting Directive, was an EU directive established in 1978 to harmonize company law and accounting practices among EU member states.
The fourth market involves the direct trading of large blocks of securities between institutional investors, bypassing brokers to save on commissions.
A Forward Rate Agreement (FRA) is a financial contract between two parties to exchange interest payments on a specific notional amount of money at a predetermined future date.
Fractional interest involves ownership of some but not all of the rights in real estate, such as easements, hunting rights, and leasehold interests.
Fractional reserve banking is a regulation in the banking industry whereby banks (and other similar institutions) keep reserves that are less than their total deposits.
A fractional share represents a unit of stock that is less than one full share. Fractional shares arise from stock dividends, stock splits, or dividend reinvestment plans.
A situation that arises when two transactions, especially foreign-exchange transactions, offset each other commercially but not in terms of taxation.
The Framework for the Preparation and Presentation of Financial Statements, also known as the Conceptual Framework for Financial Reporting, provides the foundation for setting accounting standards and deciding how to resolve accounting issues.
A franchise is a license granted by a company to an individual or firm to operate under the company's brand, using its name, products, services, promotions, selling, distribution, and display methods. It also refers to a right to market company goods or services in a specific territory.
Franchise tax is a state tax, usually regressive, imposed on a state-chartered corporation for the right to do business under its corporate name.
Understanding the concept of 'franked' in accounting, particularly within the context of dividends, and its implications on tax liabilities.
Franked Investment Income refers to dividends and other distributions from UK companies that, under the imputation system of taxation, were subject to corporation tax only once and exempt from further tax when received by other companies.
The oldest and largest of eight regional stock exchanges in Germany, accounting for more than 75% of equity trading in Germany. It first recorded trading in 1820 and is now owned by Deutsche Börse. The main market indicator is the Deutsche Aktienindex (DAX index).
Franking privilege refers to the ability granted to members of Congress to send mail without postage charges. This privilege is used for official correspondence, updates to constituents, and other legislative matters.
Intentional deception resulting in injury to another. Fraud usually consists of a misrepresentation, concealment, or nondisclosure of a material fact, or at least misleading conduct, devices, or contrivance.
Fraud and flipping are illegal practices where a property is purchased and immediately resold, often with the intent to defraud an innocent lender. This term is synonymous with property flipping done under fraudulent circumstances.
A fraudulent conveyance is the deliberate transfer of property to another person with the intention of putting it beyond the reach of creditors. Legal scrutiny under statutes like the Insolvency Act 1986 can result in such transactions being set aside by the court.
Fraudulent misrepresentation refers to a dishonest statement made by an applicant to induce an insurance company to issue coverage. If the company knew the truth, it would not accept the applicant. This gives a property and casualty insurance company grounds to terminate a policy at any time.
Fraudulent trading refers to the act of carrying on a business with the intent to defraud creditors or for any other fraudulent purpose. This includes accepting money from customers when the company is unable to pay its debts and meet its obligations under the contract. Such conduct is a criminal offence.
Freddie Mac, officially known as the Federal Home Loan Mortgage Corporation (FHLMC), is a government-sponsored enterprise designed to expand the secondary market for mortgages in the United States.
An in-depth analysis of the 2003 Freddie Mac accounting scandal where the US Federal Home Loan Mortgage Corporation fraudulently misstated billions of dollars in earnings to meet Wall Street's expectations.
Free Alongside Ship (FAS) is an international trade term where the seller is responsible for delivering the goods alongside the vessel at the named port of shipment. The buyer assumes responsibility for all risks and costs from that point forward.
In property law, a title is considered 'free and clear' if it is not encumbered by any liens or restrictions. This indicates that the property is unencumbered and conveys a good or marketable title.
A free and open market is a type of market where prices for goods and services are determined by the unrestricted interplay of supply and demand, as opposed to a controlled market where prices and supplies are regulated.
The Free Asset Ratio is a key metric in the insurance industry, quantifying the market value of an insurance company's assets relative to its liabilities. It is used to gauge the financial health and stability of the insurer.
Free Cash Flow (FCF) is a crucial financial metric that indicates the amount of cash generated or consumed by a company after accounting for capital expenditures. It is instrumental for assessing a company's ability to pay dividends, reduce debt, acquire other businesses, or invest in growth opportunities.
Free depreciation is a method of granting tax relief to organizations by allowing them to charge the cost of fixed assets against taxable profits in whatever proportions and over whatever period they choose. This provides considerable flexibility for businesses in managing their cash flow and tax liabilities.
Free Enterprise refers to the economic system wherein businesses are allowed to operate with minimal government intervention, guided primarily by the forces of supply and demand.
Free goods are items that are naturally abundant and available to satisfy demand without requiring rationing or a market price, such as sunshine. They are contrasted with economic goods.
Free In and Out (FIO) denotes a selling price that includes all costs associated with loading goods into a container, road vehicle, ship, etc., and unloading them out of the transport.
A free issue, also known as a scrip issue, is a process wherein a company issues additional shares to its existing shareholders without any extra cost, based on the number of shares that shareholders already own.
The concept of 'free lunch' refers to something good available at no cost, although the fuller expression, 'there's no such thing as a free lunch,' suggests that even seemingly free things have hidden costs.
A free market is an economic system characterized by minimal or no government intervention, where prices are determined by supply and demand dynamics. It's an environment where transactions between buyers and sellers are governed primarily by mutual consent without external pressures from monopolies, cartels, or collusive oligopolies.
Free on Board (FOB) is a term used in international commerce to distinguish the point at which the seller relinquishes all ownership, responsibility, and risk for the shipped goods.
A Free Port is a designated port area where ships can load and unload without the imposition of customs duties, enhancing trade efficiency and economic activities.
Free riders are individuals within a team or organization who benefit from collective efforts without contributing adequately due to the absence of individual responsibility requirements.
An economic policy where governments do not restrict imports or exports through tariffs, quotas, or subsidies, allowing unrestricted flow of goods between countries.
