Comparative figures are provided in financial statements for previous years of an organization, allowing for comparison and sometimes requiring adjustment if accounting policies have changed.
Financial statements covering different dates but prepared consistently and therefore lending themselves to comparative analysis, as accounting convention requires.
In some states, Comparative Negligence is a principle of tort law providing that in the event of an accident, each party's negligence is based on that party's contribution to the accident.
A Comparative Market Analysis (CMA) is an estimate of the value of real property using indicators from sales of comparable properties. It utilizes factors such as price per square foot but is not considered an official appraisal and does not adhere to professional appraisal standards.
Comparison Shopping is the process whereby a consumer gathers as much information as possible about particular products and services for comparison before purchasing them. It involves visiting stores, comparing advertisements, and conducting related research.
In the context of technology and computing, the term 'compatible' refers to the ability of two devices or systems to work together without special adaptation. This typically means that hardware or software from different manufacturers can operate in conjunction with one another seamlessly.
Compensated absences refer to certain periods during which employees are paid even though they do not attend work. This concept is crucial for proper financial reporting and management in organizations.
A compensating balance is a sum of money deposited at a bank by a customer, which acts as a condition for the bank to lend money to the customer. It serves as a form of collateral or security for the loan.
A compensating error is an accounting error that is balanced out by another error, making the errors cancel each other out so that the trial balance does not reveal the mistake.
Compensation refers to the direct and indirect monetary and nonmonetary rewards provided to employees in recognition of the value of their job, their personal contributions, and their performance. These rewards must align with the organization's ability to pay and comply with relevant legal guidelines.
A compensation for loss of office is a lump-sum ex gratia payment made to an employee or director when their service contract is terminated. This payment can be wholly or partly tax-free provided the employee is not entitled to the compensation under the service contract.
Payment to someone who has suffered harm, such as for loss of income, expenses incurred, property destroyed, or personal injury. These payments, except for personal injury damages, are generally taxable.
Compensatory stock options are financial instruments provided to employees as partial compensation for their services, commonly used by firms to align employee interests with those of shareholders.
Compensatory time, often referred to as comp time, is time off that an employee is allowed to take in lieu of overtime pay.
A person legally capable of entering a contract. They must be of legal age and not mentally incompetent or under the influence of intoxication.
Competition refers to the rivalry in the marketplace wherein goods and services are bought from those who provide 'the most for the money.' It rewards efficient producers and suppliers, driving the economy toward the efficient use of resources.
The Competition and Markets Authority is a UK government body responsible for protecting consumer interests, and ensuring businesses compete fairly, while promoting thriving economic markets.
The Competition and Markets Authority (CMA) is a regulatory body in the UK responsible for ensuring that competition law is enforced to maintain market fairness, protect consumers, and enhance business innovation.
A competitive advantage is the measure of an organization's product, service, or unique capability that allows it to outperform its peers within the market. It signifies the unique position and value proposition that a company holds over its competitors.
A competitive bid is a sealed offer, including price and terms, submitted by a contractor to a purchaser, who selects the bid with the best combination of price and terms. This system is widely used by municipalities, railroads, and public utilities.
A competitive bought deal is an underwriting agreement wherein the borrower seeks simultaneous competitive quotations from multiple banks for the purchase of an entire new issue of bonds or similar securities at a fixed price.
Competitive equilibrium refers to a market state where supply equals demand, resulting in an equilibrium price where no buyer or seller has an incentive to change their behavior.
A competitive strategy is a plan formulated by an organization to gain a competitive edge over its rivals. In the context of advertising, it may include tactics designed to discredit rival brands, undercut prices, or highlight unique product qualities and consumer benefits not found in competitors' offerings.
A competitor is a manufacturer or seller of a product or service that is sold in the same market as that of another manufacturer or seller. Competitors offer products or services that satisfy similar consumer needs within the same market.
The gathering of data about a competitor's products and prices to identify actual or future sources of competitive advantage. Understanding a competitor's strengths and weaknesses helps an organization develop its own strategy.
The presentation of financial statement information by the entity without the accountant's audit or assurance as to conformity with Generally Accepted Accounting Principles (GAAP).
A compiler is a computer program that transforms code written in high-level programming languages like FORTRAN or PASCAL into machine language.
A complaint is the initial pleading by the plaintiff in a civil action that sets out the facts and the basis of the claim. It serves to give notice to the adversary of the nature and basis of the plaintiff's assertions. In criminal law, a complaint is the preliminary charge made by one person against another, though formal proceedings cannot commence without an indictment or information.
Complementary goods are products that are often consumed together, where the demand for one increases when the price of the other decreases, and vice versa.
A complete audit is an extensive examination of a company's system of internal controls and the details of its books of account, including subsidiary records and supporting documents.
Complete Liquidation refers to a series of distributions that redeem all the stock of a corporation under a specific plan.
The completed-contract method is an accounting approach where net profit on a long-term contract is reported only when the contract is fully completed. Pre-completion expenses are also deferred until the project is finished.
The principle that the financial information provided by a company should not omit anything material, ensuring the financial statements are comprehensive and useful for decision-making.
A legal instrument used to guarantee the completion of a real-estate development according to specifications. It is more encompassing than a performance bond, which ensures that one party will perform under a contract on the condition that the other party performs.
Completion risk refers to the inherent risk within project financing schemes that the project might not be completed on time, within budget, or to the required specifications. This type of risk is a critical concern for investors and stakeholders in large-scale projects.
A financial structure with stock outstanding that has potential for dilution, requiring a dual presentation of earnings per share by showing primary earnings per common share and fully diluted earnings per common share.
A complex trust is a type of trust that can either distribute or retain income according to its governing instrument or state law, or has a charitable beneficiary. It is entitled to only a $100 exemption.
Compliance in accounting and corporate governance refers to the adherence to laws, regulations, and internal controls that govern an entity's operations, ensuring legal and regulatory obligations are met.
A compliance audit is an extensive evaluation of an organization's adherence to regulatory guidelines. This includes a scrutiny of internal control procedures to ensure proper operation according to established protocols.
Tests used during an audit to determine the effectiveness of a company's control procedures. The extent of compliance testing will depend upon the extent to which specific controls are relied upon. Results of compliance testing will indicate the necessary level of substantive testing (tests of transactions, balances, etc.). If controls are found to be working well, substantive testing may be reduced to some extent.
An effort to depreciate a property based on the lives of individual assets within it, allowing for more accurate allocation of expense over time compared to composite depreciation.
A component part is a unit of a system that performs part of the transformation or processing activity. For example, a fuel injector is a component part of an automobile's fuel system.
Composite depreciation is a method where a single depreciation rate is applied to an entire asset, despite its components having varying useful lives.
A composition in accounting refers to an agreement between a debtor and creditors, where the debt is partially forgiven in exchange for a proportion of what is due. This can be formalized through a deed of arrangement or an individual voluntary arrangement.
An alternative to bankruptcy, in which creditors agree to accept partial payment in full settlement of their claims. Most often seen in failures of small, unincorporated businesses, whose creditors reason that they will benefit more in profits on future sales to a going concern than they would on liquidation.
The compound amount of one refers to the value that $1 would grow to if it is left on deposit with interest allowed to compound over a period of time.
Compound discount is the difference between the value of an amount in the future and its present discounted value. For example, if £100 in five years' time is worth £88 now, the compound discount will be £12.
The single periodic rate of growth for several periods, typically years, which accounts for cumulative growth in a manner similar to compound interest.
A compound instrument is a financial instrument that contains both an equity element and a debt element. These are complex financial instruments which require careful handling in financial reporting.
Compound interest refers to the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. It is a crucial concept in finance and investing, offering greater returns compared to simple interest.
A compound journal entry is an accounting entry that affects more than one account, allowing for multiple debits and/or credits in a single transaction. It is commonly used for complex transactions in double-entry bookkeeping.
The Comprehensive Annual Financial Report (CAFR) is the official annual report of a government entity, encompassing a wide array of financial statements and disclosures.
The Comprehensive Annual Financial Report (CAFR) is the official annual report of a government entity in the United States. It provides detailed financial statements and analysis of a government's financial health.
Comprehensive auditing is a thorough review process that encompasses evaluation of an organization's operations, compliance, and financial performance to ensure accuracy, efficiency, and adherence to laws and regulations.
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is a federal law designed to clean up sites contaminated with hazardous substances and to impose liability for cleanup on responsible parties.
Federal law, known as Superfund, enacted in 1980 and reauthorized by the Superfund Amendments and Reauthorization Act (SARA) in 1986. The law imposes strict joint and several liability for cleaning up environmentally contaminated land.
Comprehensive General Liability (CGL) insurance provides coverage against all liability exposures of a business unless specifically excluded. This includes coverage for products, completed operations, premises and operations, elevators, and independent contractors.
Comprehensive Glass Insurance is a specialized type of insurance policy that provides coverage for damage to or loss of glass components within a structure. This type of insurance helps to mitigate the financial burden associated with repairing or replacing glass windows, doors, and other structural glass elements.
Comprehensive health insurance provides extensive coverage for hospital and physician charges, incorporating elements of both basic medical expense and major medical policies, subject to deductibles and coinsurance.
Comprehensive income is the total of an entity's operating profits and holding gains recorded during a particular accounting period, encompassing both realized and unrealized gains.
A Comprehensive Income Statement is a financial document that reports a company's total earnings, including those not realized in the income statement, such as unrealized gains and losses, allowing for a more inclusive picture of financial performance.
Comprehensive insurance coverage in automobile insurance provides protection from physical damage (other than collision) and theft of the insured vehicle, covering events like fire damage, vandalism, and natural disasters.
Comprehensive Liability Insurance provides businesses with coverage for negligence-based civil liability in various situations, including bodily injury, property damage, and medical expenses arising from the operation of premises, completed operations, and products.
Comprehensive Personal Liability Insurance offers protection against personal liability claims arising from personal acts and omissions by the insured and residents of the insured's household. This coverage includes a range of activities, from sports and pet-related incidents to unique occurrences like someone tripping in the insured's cemetery plot.
A comprehensive plan is a set of guidelines developed and adopted by a local government to govern public policy toward future land development within the jurisdiction.
A negotiation strategy wherein parties agree to make mutual concessions to reach a consensus or settlement. In management and labor relations, compromise entails both parties yielding some demands to obtain mutually acceptable terms.
A comptroller is a high-level executive who oversees the accounting and financial reporting functions within an organization, often in a governmental or nonprofit entity. The cabinet-level position is usually responsible for ensuring adherence to financial regulations and the accuracy of reported financial data.
A federal official appointed by the President and confirmed by the Senate, responsible for chartering, examining, supervising, and liquidating all national banks.
Compulsory arbitration involves the forceful submission of a labor dispute to a neutral third party, such as a government body or the American Arbitration Association, for resolution. This method, also known as binding arbitration, has been resisted by labor unions and employers who prefer collective bargaining and economic pressure to resolve disputes.
A compulsory checkoff is a mandatory deduction from an employee's wages by the employer, commonly related to union dues or other agreed-upon charges.
Compulsory insurance refers to insurance coverage mandated by law. It requires individuals or businesses to possess a minimum amount of insurance to cover specific risks and liabilities, ensuring financial protection and compliance with regulatory standards.
Compulsory liquidation, also known as compulsory winding-up, is the process of liquidating a company by a court order. This detailed guide covers its definition, examples, frequently asked questions, related terms, and further reading suggestions.
Compulsory retirement, also known as mandatory retirement, refers to being forced to resign from one's employment at an age specified by union contract or company policy. This practice has evolved significantly with changing laws and regulations.
A computer is a machine capable of executing instructions to perform operations on data. Its distinguishing feature is its ability to store its own instructions, allowing it to perform numerous operations without needing new instructions each time. Modern computers are composed of high-speed electronic components capable of executing millions of operations per second.
Computer conferencing allows participants at different locations to exchange information and discuss problem solutions using computers or terminals, providing flexibility to engage in discussions anytime.
Computer Hardware encompasses all the electronic and mechanical parts essential for a computer system to function, such as the central processing unit, disk drive, screen, and printer. This term excludes software, which refers to programs and applications.
Computer Integrated Manufacturing (CIM) is an integrated computerized system combining all elements of Computer-Assisted Design (CAD) and Computer-Aided Manufacturing (CAM) to ensure efficient product development and manufacturing through real-time coordination.
A computer network is a set of computers connected together for the purpose of sharing resources. Networks are commonly categorized based on their scale, including Local Area Network (LAN), Wide Area Network (WAN), and others.
A computer screen is a display device that allows users to interact with their computer system by viewing visual output.
The practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks, unauthorized access, damage, or theft.
A computer virus is a type of malicious software program ('malware') that, when executed, replicates by inserting copies of itself into other computer programs, data files, or the boot sector of the hard drive. The term 'virus' is also commonly, but erroneously, used to refer to other types of malware, including adware and spyware programs that do not have a reproductive ability.
Computer-Aided Design (CAD) is the use of computer technology for design and design documentation. CAD software replaces manual drafting with an automated process.
Computer-Aided Instruction (CAI) refers to a form of teaching where a computer system replaces or supplements a live instructor, allowing learners to proceed at their own individual pace.
Techniques developed by auditors for performing compliance tests and substantive tests on computer systems for firms in which the data being audited is processed by computers and held on computer files.
A computer-assisted method of developing three-dimensional designs, crucial for the engineering and architectural professions, allowing designs to be tested under simulated real-time conditions without building physical models.
Computer-Assisted Mass Appraisal (CAMA) refers to proprietary software used to make fast valuations of one or more real properties. This software ranges from simple tools that apply a fixed percentage increase to property values, to highly sophisticated systems that utilize complex statistical techniques to compare and consider other properties.
Automatic transcription of machine shorthand notes into a computer from words recorded in electronic form.
Computerized Loan Origination (CLO) refers to the process of initiating a mortgage loan using specialized computer software that connects the originator with one or more mortgage lenders. This system allows real estate brokers to offer a wider range of services.
A con artist, also known as a con man, is a practitioner of fraud or theft by deception who first wins the confidence of a victim. Con artists usually play on the victim's desire to get something for nothing.
Concealment refers to the intentional withholding or secreting of information. In the context of insurance, if the insured withholds information on a material fact about which the insurance company has no knowledge, the company has grounds to void the contract.
Concentration banking is a financial management strategy aimed at accelerating cash collections from customers by utilizing a network of regional banks, from which funds are transferred to a central main concentration account.
A concentration ratio measures the proportion of total industry sales controlled by the largest firms within the industry, typically the top four or eight firms.
A concept test is a type of research study whose main goal is to evaluate an idea or concept developed to determine its potential success. It aims to assess the effectiveness of an advertising campaign in reaching its intended objectives.
A statement of theoretical principles that provides guidance for financial accounting and reporting. It serves as a foundation for setting accounting standards and provides a coherent system of interrelated objectives and fundamentals.
A document setting out the basic accounting concepts informing International Accounting Standards and International Financial Reporting Standards, serving as a guide in the preparation and presentation of financial statements.
Conceptual skills refer to the ability to understand the interrelationship of ideas or elements in relation to the totality. These skills are crucial for strategic thinking, problem-solving, and decision-making in various fields such as management, business, and education.
In management and business contexts, 'concern' refers to matters requiring attention, issues in labor relations, or business organizations.
The term 'concession' can refer to various business arrangements, such as small shops in lobbies, government-granted rights, rent reductions, or compensation in corporate underwriting.
A Concession Agreement is a contract between a host government's government and a foreign firm that outlines the terms under which the firm will invest in the host country, covering aspects like taxes, profit remittance, and ownership transfer.
Conciliation is a process used in labor disputes where a neutral third party attempts to bring together management and labor to discuss and resolve their differences. The goal is to reconcile the disputing parties through facilitated discussion and negotiation.
