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.
The right to sell an ownership interest to another party who acquires all of the seller's rights, without permission from others. This is a characteristic of corporate stock, though not of restricted stock, as contrasted with a partnership interest.
Indirect supervision of subordinates, form of management supervision that allows others to function on their own without extensive direct supervision. People are allowed to prove themselves based upon accomplishments rather than meeting specific supervisory criteria.
The Freedom of Information Act (FOIA) is a federal law that provides the public with the right to request access to records from any federal agency. It is often described as the law that keeps citizens in the know about their government.
The Freedom of Information Act (FOIA) is a federal law that mandates the disclosure of documents and materials generated or held by federal agencies to the public, subject to specified exemptions including issues related to national security.
A type of estate in land where ownership is held in fee simple, giving the owner complete and indefinite ownership of the property.
A freehold estate is an estate in land of uncertain duration, encompassing both estate in fee and a life estate. This term describes rights in land ownership that are free from any rent or leasehold obligations.
Computer software that is distributed at no cost, typically over the Internet, allowing users to use, test, and provide feedback or improvements. Unlike shareware, freeware is fully functional without requiring payment.
A multiple-lane divided highway with fully controlled access, usually involving interchanges for intersecting roads, designed for high-speed vehicular traffic and typically without toll charges.
A court order preventing a defendant from dealing with specified assets to ensure that any judgment given against them will not be rendered ineffectual by their disposal or dissipation of those assets.
A freight forwarder, also known as a forwarding company, acts as an intermediary between a shipper and various transportation services, facilitating the global movement of goods while managing logistics and documentation.
Freight insurance provides coverage for goods during shipment on a common carrier, ensuring protection against potential losses or damages during transit.
Frequency refers to the number of times an event or occurrence happens within a specified period, applicable in various contexts such as advertising, communications, and general activities.
A frequency diagram is a type of bar diagram that illustrates how many observations fall within each category. It is a fundamental tool in statistics for data visualization.
Frequently Asked Questions (FAQ) serve as a resource where common questions regarding a particular topic are compiled and answered, ensuring users can easily find essential information without having to ask repeatedly.
Frictional unemployment is a form of unemployment that occurs naturally within an economy, caused by individuals transitioning between jobs, relocating, and altering their economic activities. It is considered a normal and unavoidable aspect of the labor market.
Frictional unemployment refers to the short-term, transitional phase of unemployment that occurs when individuals are temporarily out of work while moving between jobs, entering or re-entering the labor market.
The term 'friendly fire' has dual meanings: one in the context of intentional, contained fires for practical use and another in a military context where individuals are accidentally harmed by their own allies.
A non-profit-making mutual company registered under the Friendly Society Acts (1896-1955), offering personal assurance and insurance benefits.
A Friendly Suit is an action authorized by law, brought by agreement between the parties, to secure a judgment that will have a binding effect in cases where an agreement or settlement would not.
A friendly takeover occurs when the management and board of directors of the target company are in agreement with the acquisition and recommend that shareholders approve the offer.
Non-monetary benefits offered to the employees of a company in addition to their wages or salaries, and benefits provided to shareholders beyond dividends.
A frivolous lawsuit is a legal claim presented in court without substantial grounds or factual support. Such claims are considered a waste of judicial resources and can result in penalties for the party who files them.
A frivolous tax position is one that is knowingly advanced in bad faith and is patently improper, often with the intent to delay or avoid tax obligations without any legitimate basis.
A standard measurement of land, applied at the frontage of its street line. It is used for lots of generally uniform depth in downtown areas.
Cash necessary to start a project. Front money is generally required for purchasing a site, preparing plans and studies, obtaining permits, and securing loan commitments.
The front office refers to the offices of the major executives within a company; it is the nucleus of the operational management center, often located near the entrance of the organization.
A charge levied by a lender when a loan is set up or when the first payment of the loan is taken.
A front-end load is an initial sales charge or commission incurred by an investor when buying a financial product, used to cover administration fees and agent commissions.
Frontage refers to the linear distance of a piece of land along a body of water, street, or highway. Properties with frontage are often valued based on the rate per front foot, which can significantly influence their market price.
A frozen account refers to a bank account from which funds may not be withdrawn until a lien is satisfied or a court order is received freeing the balance. This situation can occur due to legal issues such as disputes over the ownership of property.
Assets that, for one reason or another, cannot be used or realized. This might occur due to government restrictions, legal actions, or sanctions, preventing their liquidity or transfer.
FRS 102 sets the standard for accounting principles and practices for small to medium-sized enterprises in the UK and Republic of Ireland, aiming to simplify reporting requirements and enhance financial transparency.
Frustration of Contract refers to the termination of a contract due to an unforeseen event that renders its performance impossible, illegal, or radically different from what was initially agreed.
The FTSE 100, widely known as the Footsie, is a major market capitalization-weighted index consisting of 100 blue-chip stocks listed on the London Stock Exchange, commonly referenced for gauging the performance of leading companies in the UK.
The FTSE Indexes are a series of stock market indices created by the Financial Times and the London Stock Exchange to measure the performance of companies listed on the London Stock Exchange.
A comprehensive overview of FTSE Indexes, including their types, historical significance, and relevance to investors and portfolio managers.
Fulfillment encompasses the processes necessary to receive, service, and track orders sold via direct marketing. It includes various systems tailored to specific product types and services, such as subscriptions, book club memberships, continuities, catalog merchandise, and fund raising efforts.
Full absorption costing, also known as absorption costing, is a method of accounting that captures all direct and indirect manufacturing expenses when determining the cost of the final product.
Full consolidation is a method in which 100% of each item of all subsidiary undertakings is incorporated into the consolidated financial statements of a group, even when the parent company does not own 100% of a subsidiary.
Full cost pricing is a method of setting the selling prices of a product or service that ensures the price is based on all the costs likely to be incurred in its supply.
Full costing, also known as absorption costing, is an accounting method where all fixed and variable manufacturing costs are considered to be product costs.
The Full Costing Method is an extensive approach in accounting that includes all the costs associated with producing a product or service, encompassing both direct costs and overheads allocated to the cost unit.
In the context of insurance, full coverage refers to an insurance policy that covers all insured losses in full, without leaving the policyholder responsible for any out-of-pocket expenses related to a covered event.
Full Disclosure refers to the obligation to release all material information pertinent to a transaction, especially in the context of securities where public information requirements are regulated.
In computer usage, full duplex refers to the transmission of data in two directions simultaneously, allowing for more efficient communication.
Full employment is a rate of employment defined by government economists to take into account the percentage of unemployed individuals who would not be employed regardless of the nation's economy. It is currently considered to be at 5.2% unemployment.
Full faith and credit refer to the comprehensive commitment of a government entity to use its taxing and borrowing power and other revenue sources to ensure the payment of interest and principal on its issued bonds.
Full retirement age is the age at which a person may first become entitled to full or unreduced retirement benefits. It varies depending on the year of birth, and understanding this concept is crucial for effective retirement planning.
The age at which a Social Security beneficiary can receive full Social Security retirement benefits. It is defined by the Social Security Act of 1935 and its amendments, particularly the 1983 amendment which adjusted full retirement ages based on date of birth.
Full-cost transfer prices are internal pricing strategies where transfer prices are set based on full cost pricing but do not include a profit margin for the supplying division. This method is widely used but can lead to issues if cost information is inaccurate.
A full-service broker is a financial professional who offers a wide range of services to clients, including investment advice, research, and portfolio management. This contrasts with a discount broker, who typically only executes trades.
A fully amortized loan is one in which payments of both interest and principal are made regularly according to a set schedule, which are sufficient to liquidate the loan over its term; it is essentially self-liquidating.
A term used in accounting to describe a fixed asset to which all allowable depreciation has been charged according to accounting or tax laws. The asset is carried on the books at its residual value, although its market value may be higher or lower.
A figure showing earnings per common share after assuming the exercise of all outstanding warrants and stock options, and the conversion of convertible bonds and preferred stock, all potentially dilutive securities.
Fully Diluted Earnings Per Share (EPS) for a company that takes into account not only the number of shares in issue but also those that may be issued as a result of such factors as convertible loans, options, or warrants. International Accounting Standard 33 requires that diluted earnings per share be disclosed on the face of the profit and loss account as well as basic earnings per share. The US equivalent is primary earnings per share.
A Fully Paid Policy is a type of limited pay whole life insurance policy under which all premium payments have been made. This status indicates that no further premium payments are required, yet the policy remains active for the life of the insured.
A Fully Paid Share is a share on which the full nominal or par value has been paid by the shareholder, including any premium. Such shares denote that the shareholder has no further financial obligation towards the company concerning the initial capital amount.
This technique involves collecting the costs of an organization by function and presenting them to the functional management in operating statements on a regular basis.
A function in accounting refers to a specific section or department of an organization that carries out discrete activities managed by a director or manager. Functional budgets are often created for these sections. Examples include production, sales, finance, and personnel.
Functional Authority refers to the ability of staff members to initiate and veto actions in their area of expertise, allowing decisions to be directly implemented by those with specialized knowledge. Common areas include accounting, labor relations, and employment testing.
A functional budget is a financial or quantitative statement prepared for a specific function of an organization. It summarizes the policies and the expected level of performance to be achieved by that function over a budget period.
The currency of the immediate economic environment in which an entity operates, i.e. the one in which it earns and spends cash and which chiefly determines its costs and prices. This will sometimes differ from the currency in which its accounts are presented (the presentation currency), especially where the entity is part of a multinational group.
Functional obsolescence refers to the decline in a property's value due to changes in design, style, or technology that make the property less desirable in the eyes of buyers or tenants.
A structure of an organization based on functional performance; organizational departments created to fulfill organizational functions such as marketing, finance, and personnel. This type of organization has characteristics of both line and staff functions.
A fund refers to a pool of financial resources managed and set aside for a specific purpose. Common types of funds include mutual funds, pension funds, and endowment funds, among others.
