Pollution involves the introduction of contaminants into the natural environment, causing adverse changes. It is most commonly associated with emissions from industrial processes, waste disposal, and other human activities that introduce harmful substances into air, water, and land.
A Ponzi Scheme is a fraudulent investment scam promising high returns with little risk to investors. The scheme pays returns to earlier investors using the capital of newer investors rather than from profit earned by the operation. Named after Charles Ponzi, it eventually collapses when there are no new investments to cover withdrawals.
The term 'pool' has various definitions across different industries including corporate finance, industry, insurance, investments, and real estate. It generally refers to a combination of resources or funds for a specific purpose.
Pooling of interests was an accounting method, previously utilized in mergers and acquisitions, allowing the combining of companies' balance sheets by line item additions of their assets and liabilities.
The pooling-of-interests method was an accounting approach previously used in business combinations in the USA, reflecting the continuation of the acquired company's accounts at book value.
An illegal scheme whereby unfavorable information about a stock is circulated, usually on the Internet, to drive down its price so it can be bought cheaply and later converted into a profit.
Population refers to the entire pool of individuals or entities that share a common characteristic from which statistical samples can be drawn for a study.
Popup advertising involves messages that open in a new browser window to promote products and services. It is typically met with consumer resentment, leading to the development and widespread use of software to block popups and pop-unders.
A popup menu is a secondary menu that appears above a selected menu item, providing additional options specific to that item. Often used in graphical user interfaces, popup menus enhance user interaction by offering context-relevant commands.
A port of entry is a location, such as a seaport, airport, or land border entry point, where authorities may inspect incoming shipments and assess customs duties as applicable.
Portability in the context of employee benefits, such as pension and insurance coverage, refers to the characteristic that allows employees to retain their benefits even when they leave their current job to take up a new one with a different employer.
The Portable Document Format (PDF) is a versatile file format created by Adobe that ensures the preservation of document formatting and allows secure sharing of documents independent of software, hardware, or operating systems.
Compensation for all expenses incurred while traveling from door to door. Portal-to-portal pay is used in business organizations for business-related purposes, such as business travel where all expenses including transportation are covered.
Porter's Five Forces is a powerful framework for analyzing the competitive forces that shape every industry, and it helps determine an industry's weaknesses and strengths. Developed by Michael E. Porter, it provides insights into the five forces that drive competition within an industry and influence its overall profitability.
In the world of finance, a portfolio refers to the collection of investments held by an individual or institution. This diversified set of holdings could include stocks, bonds, commodities, real estate, and other assets.
Portfolio income in taxation includes interest, dividends, royalties, and gains and losses from investments. It distinguishes between passive, active, and portfolio income, indicating that passive activity losses may not be offset against active or portfolio income.
Portfolio insurance, also known as portfolio protection, involves using financial futures and options markets to safeguard a portfolio's value against market downturns.
A professional responsible for managing the securities portfolio of an individual or institutional investor, ensuring alignment with the client's financial goals and risk appetite.
Portfolio reinsurance is a coverage mechanism where an insurance company's portfolio is ceded to a reinsurer, who reinsures a given percentage of a particular line of business. This approach allows the primary insurer to mitigate risk exposure by transferring some of its liabilities to the reinsurer.
A theoretical approach to investment choices based on the assumption that for any given expected return, rational investors will seek to minimize their risk, and for any given level of risk, they will seek to maximize their return.
Portrait orientation refers to the arrangement of a computer screen or sheet of paper where the vertical dimension is greater than the horizontal.
The term 'position' can refer to various contexts, from strategic market placement to financial conditions, and investments. In investments, it is a key concept involving either long or short stakes in securities or markets.
A Position Schedule Bond is a type of fidelity bond that provides financial protection to businesses by covering losses resulting from fraudulent or dishonest acts by specifically named employees.
Positioning refers to the strategic process by which a brand or product is marketed in a specific manner in order to achieve a unique, desired perception in the target audience’s mind, relative to competitors.
An approach in accounting that aims to explain the existing practices and rationale behind accounting methods, rather than prescribing how accounting should be done.
Positive carry is a financial situation in which the cost of borrowing money to finance an investment is lower than the yield earned from that investment.
Positive cash flow refers to the amount of cash that a business generates from its operations, which exceeds the cash outflows. It is a critical indicator of financial health, showing that a company is capable of meeting its obligations, reinvesting in its operations, and paying dividends.
A term used in statistics to describe the direct association between two variables, indicating that as one variable increases, the other variable also increases. Positive correlation is typically represented by correlation coefficients greater than 0.
An investment strategy involving the use of borrowed funds to increase the return on an investment.
A positive yield curve, also known as a normal yield curve, reflects a usual situation where interest rates are higher on long-term debt securities than on short-term debt securities of the same quality, indicating investor expectations for future economic growth.
In legal terms, possession refers to having, holding, or detaining property under one's control, and involves both custody and the right to exercise dominion.
Additional consumer value created by transferring a product's ownership.
POST in accounting refers to transferring accounting entries from a journal of original entry into a ledger book in chronological order. Banks traditionally posted checking account deposits and withdrawals in a ledger and summarized these transactions on a monthly bank statement. Nowadays, such operations are computerized.
The Post Hoc Ergo Propter Hoc Fallacy, which translates to 'after this, therefore because of this,' is a logical misstep that incorrectly connects sequential events, assuming that if one event follows another, the first event must be the cause of the second. This type of fallacious reasoning can lead to incorrect conclusions, such as attributing a falling birth rate to a prior reduction in the population of storks.
Post-balance-sheet events, also known as subsequent events, are events or transactions that occur after the balance sheet date but before the financial statements are issued or available to be issued. These events sometimes impact the financial reporting and disclosures of the entity.
Post-cessation receipts are amounts accruing from a trading activity that are received after the trade has ceased. For tax purposes, these receipts are treated as income in the year of receipt, from which any relevant trade expenses incurred can be deducted. An election can also be made to treat them as income in the year the trade ceased.
A Post-Closing Trial Balance is prepared after closing entries are recorded and posted, ensuring that beginning balances for the next accounting period are accurate and free of temporary accounts.
A post-completion audit involves comparing the actual cash flows with the forecast cash flows for an investment to assess the validity of the initial financial projections and ultimately improve future investment decisions.
To insert a date on a document that is later than the date on which it is signed, making it effective only from the later date. A post-dated (or forward-dated) cheque cannot be negotiated before the date written on it, irrespective of when it was signed.
Benefits provided by an employer to former employees, typically those who have retired. The accounting treatment for these benefits, including health care and pensions, varies based on whether they are part of a defined-contribution or defined-benefit pension scheme.
A postage meter is a machine widely used to print postage on envelopes and labels, substituting printed stamps. Authorized by postal services, these machines simplify mailing processes for businesses, ensuring accurate postage and reducing time spent dealing with individual stamps.
Postage rate refers to the cost of mailing a letter or package, which is determined by the U.S. Postal Service. This cost varies based on the parcel's weight, destination, and the level of service selected.
A specialized savings account operated via postal mail or automated teller machines (ATMs), offering higher interest rates due to its reduced operational costs.
A postdated check is a check written by the payer for a date in the future. It is not negotiable until the specified date becomes current.
A multi-faceted term used across various fields such as physical display, bookkeeping, civil procedure, commercial law, and property management.
A cancellation affixed on stamps by the U.S. Postal Service to indicate the use of postage. The date and place of mailing are usually indicated by the postmark and can be offered as evidence in a legal dispute of when and where something was mailed.
PostScript is a page description language used in the electronic and desktop publishing areas to define the layout and graphical content of a printed page. It serves as a graphical command language for output devices like laser printers, instructing them on how to print text and graphics.
Potential GDP is the maximum feasible level of Gross Domestic Product (GDP) that an economy can achieve when its resources, including capital and labor, are fully utilized.
Potential Gross Income (PGI) represents the maximum rent a property could generate if it were fully leased at all times throughout the year, without any deductions for vacancies or uncollected rents.
A Potentially Exempt Transfer (PET) refers to a gift that may not be immediately subject to inheritance tax, provided the donor survives for a period of seven years after making the transfer. PETs play a significant role in estate planning and gift tax strategies.
A potentially exempt transfer (PET) is a lifetime gift by an individual that becomes exempt from inheritance tax if they survive seven years beyond the date of the gift. If the donor passes away within seven years, inheritance tax liability may arise.
The pound sign, also known as the number sign or hash mark, is a character ( # ) often used in various applications for number formatting, as a wildcard in searches, or in programming.
Poverty is a socio-economic condition where an individual or a group lacks the financial resources and essentials for a minimum standard of living.
A power center is a type of shopping center characterized by a small number of tenants, most of which are anchor tenants or 'category killers'—dominant retailers in their respective markets.
A Power of Attorney (POA) is a legal document that allows an individual, known as the principal, to designate another person, called the agent or attorney-in-fact, to make decisions and act on their behalf in specified matters.
Power of Attorney (POA) is a legal instrument that allows one person (the principal) to appoint another (the agent or attorney-in-fact) to act on their behalf in various capacities, such as managing property or financial matters.
A Power of Sale is a clause included in mortgages or deeds of trust that grants the lender (or trustee) the authority to sell the property in the event of certain defaults, typically without court intervention.
A power surge is a sudden and brief increase in voltage that travels through power lines. It can potentially damage electrical equipment, especially sensitive electronics such as computers.
Powers of appointment refer to the authority granted to an individual, referred to as the donee or appointee, to designate the distribution of certain property or assets, either held in a trust or as part of an estate. This power can affect estate planning significantly.
Learn about the PRA, its role in financial regulation, the implications for banks and financial institutions, and the broad spectrum of activities it oversees.
Practical Capacity is the highest activity level at which a factory can operate efficiently, considering unavoidable losses of productive time such as vacations, holidays, and equipment repairs. It is also known as maximum practical capacity.
Practice Notes are issued by the Auditing Practices Board to assist auditors in applying Statements of Auditing Standards to specific circumstances and industries. They aim to indicate good practice and are more persuasive than prescriptive.
Pre-acquisition profits refer to retained earnings accumulated by a company before it is acquired by another entity. These profits are not to be distributed to the shareholders of the acquiring company as dividends, as they represent a recovery of the cost of investment rather than income.
Pre-approval is a critical step in the mortgage application process where a lender agrees to provide a loan amount to a borrower under certain conditions. It signifies a preliminary agreement from the lender, boosting the borrower's bargaining power during home purchasing.
The pre-budget report (PBR) is an economic forecast and policy statement presented by a government as a precursor to the main annual budget, providing an update on the nation's economic situation, planned economic policy direction, and public finance projections.
In the UK, a statement made by the Chancellor of the Exchequer in October-December that reports on the state of the economy and points forward to the Budget he will unveil in the spring.
Pre-emption rights in UK company law give existing shareholders the first opportunity to buy new shares before they are offered to others, ensuring their ownership percentage remains unchanged.
Pre-financing refers to an arrangement where a buyer, often an importer, finances the activities of a supplier by making an advance payment against future delivery. This practice is sometimes employed as a fair trade policy to support farmers in developing nations.
The precautionary motive is the cause of an action taken to prevent something undesirable from occurring. For example, a homeowner puts the car in the garage at night to prevent it from being stolen.
A basis for assessing profits where the assessment in any given fiscal year is based on the accounts that ended during the previous tax year. In the UK, the PYB was replaced by the current-year basis of assessment from 1997--98 onwards.
A command issued by the Commissioners of Inland Revenue to a taxpayer to produce specific documents, usually by a designated date.
Precious metals such as gold, silver, platinum, and palladium are highly valued for their intrinsic value, role in backing world currencies, aesthetic appeal, and industrial applications. Their prices are influenced by supply and demand, political and economic considerations, and global events.
Preclosing is a rehearsal of the closing process in real estate transactions where instruments are prepared and signed by some or all parties to the contract. It is especially useful when closings are expected to be complicated.
The Preclosing Trial Balance is an internal financial statement used to ensure that total debits equal total credits before the financial books are closed for the accounting period.
Predatory lending refers to unethical practices by mortgage lenders who exploit borrowers, often resulting in excessive debt, deceptive loans with high rates and fees, and inflated charges for services.
Predatory pricing involves deliberately lowering prices of merchandise or services to drive competitors out of the market, with the intent to raise prices once the competition is eliminated.
A predetermined overhead rate is an estimated rate used to allocate overhead costs to products or job orders before actual costs are known. This rate is usually computed in advance of operations and often covers a fiscal year.
Prediction refers to the foretelling of a future event, often as a probabilistic estimate based on various estimation methods, including analysis of past patterns and statistical projections of current data.
Preemptive rights grant existing shareholders the first opportunity to purchase new shares of stock issued by the corporation, as specified in the corporation's charter.
Preexisting use refers to a land use that does not conform to the current zoning code but is allowed to continue because the use was in effect at the time the current code was passed. Also known as nonconforming use, this status typically comes with specific conditions on improvements and rebuilding of the existing structures.
The term 'prefabricated' refers to building components or entire structures that are manufactured in a factory and then assembled on the construction site. Prefabrication aims to enhance efficiency, reduce costs, and minimize construction time.
Preference occurs when an insolvent debtor favours a particular creditor, such as by paying one creditor in full, to the disadvantage of other creditors. If the debtor becomes bankrupt or goes into insolvent liquidation, the court can order restoration to ensure equitable treatment among all creditors.
A preference dividend is a type of dividend that is paid to holders of preference shares and often carries preferential rights compared to common share dividends. This term is closely associated with cumulative preference shares, especially concerning unpaid dividends from prior periods.
A type of equity ownership in a company that entitles holders to a fixed dividend before any dividends are paid to ordinary shareholders.
Preference share capital refers to the portion of a company's capital that comes from issuing preference shares, which give holders preferential dividends but typically lack voting rights.
Preference shares, also known as preferred stock, are a class of ownership in a corporation that has a higher claim on assets and earnings than common stock.
Settings that allow a computer user to customize the working environment; also referred to as options.
A creditor whose debt is prioritized over other creditors’ debt, increasing their likelihood of payment in full during a bankruptcy or company winding-up procedure.
An obligation that is prioritized for repayment over other debts.
Preferential rehiring is a provision in Title VII of the 1964 Civil Rights Act that mandates companies to reinstate or hire employees with back pay in cases where illegal job discrimination has occurred, thereby aiming to 'make whole' the victims of such discrimination.
Preferred dividends are distributions from corporate earnings and profits paid to owners of preferred stock. These payments take priority over those to be made to common shareholders.
Preferred Dividend Coverage (PDC) is a financial ratio used to measure a company's ability to pay its preferred dividends from its earnings. It is calculated by dividing the net income after interest and taxes, but before the common stock dividends, by the dollar amount of preferred stock dividends. This ratio tells how many times over the preferred dividend requirement is covered by current earnings.
Preferred risk refers to an insured, or an applicant for insurance, who has a lower expectation of incurring a loss than the standard applicant. For instance, a non-smoker applying for life insurance may receive reduced premium rates due to a longer life expectancy.
Preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares generally have a dividend that must be paid out before dividends to common shareholders and the shares usually do not carry voting rights.
A Preferred-Provider Organization (PPO) is a healthcare arrangement where a network of healthcare providers agrees to offer medical services to enrolled individuals at reduced rates.
An amendment to Title VII of the Civil Rights Act of 1964 that makes discrimination based on pregnancy, childbirth, or related medical conditions unlawful. Women who are pregnant must be treated similarly to other job applicants or employees with similar abilities or limitations.
Preleasing involves obtaining lease commitments for a building or complex before it is available for occupancy. It is often a requirement for securing a permanent mortgage.
A preliminary announcement is an early notification of a company's yearly profit or loss, primarily mandated for listed companies under the London Stock Exchange Regulations. This announcement usually includes summarized profit and loss accounts and can extend to balance sheets.
Preliminary expenses are the initial costs incurred during the establishment of a company. These expenses often include costs such as issuing shares and can be written off to the share premium account.
The preliminary prospectus, also known as the red herring, is the first document released by an underwriter of a new issue to prospective investors. It provides financial details about the issue but parts of the document may be changed before the final prospectus is issued.
