What is the Continuity of Interest Doctrine? The Continuity of Interest Doctrine (CID) requires shareholders of an acquired company to hold an equity stake in the acquiring company to allow tax deferral. The doctrine, (or CID, also known as Continuity of Proprietary Interest) stipulates that a corporate acquisition of a target firm can be done
What Is a Continuous Audit? A continuous audit is an internal process that examines accounting practices, risk controls, compliance, information-technology systems, and business procedures on an ongoing basis. Continuous audits are usually technology-driven and designed to automate error checking and data verification in real time. A continuous-audit–driven system generates alarm triggers that provide notice about
What Is Continuous Compounding? Continuous compounding is the mathematical limit that compound interest can reach if it’s calculated and reinvested into an account’s balance over a theoretically infinite number of periods. While this is not possible in practice, the concept of continuously compounded interest is important in finance. It is an extreme case of compounding, as most
What Are Continuous Operations? Continuous operations are the core profit-making activities within a business or organization that are ongoing and sustained in the event of a business disruption. In this context, it is also known as continuing operations. Continuous operations also can refer to a firm running its business around the clock 24/7, with downtime
What Is a Contra Account? A contra account is used in a general ledger to reduce the value of a related account when the two are netted together. A contra account’s natural balance is the opposite of the associated account. If a debit is the natural balance recorded in the related account, the contra account
What Is a Contra Broker? A contra broker is a broker that is taking the opposite side of a transaction initiated by another broker. For example, in a transaction in which a broker wishes to sell securities to another broker, the buyer would be a contra broker for the purposes of that transaction. Conversely, when
What Is a Contract for Differences (CFD)? A contract for differences (CFD) is an arrangement made in financial derivatives trading where the differences in the settlement between the open and closing trade prices are cash-settled. There is no delivery of physical goods or securities with CFDs. Contracts for differences is an advanced trading strategy that
What Is Construction Spending? Construction spending is an economic indicator that measures the amount of spending toward new construction. The U.S. Department of Commerce’s Census Bureau releases the monthly Value of Construction Put in Place Survey (VIP), which looks at residential and non-residential construction in the private sector, as well as state and federal construction spending.
What Is Constructive Receipt? Constructive receipt is an accounting term that requires an individual or business to pay taxes on income despite the fact that the money has not yet been received in actuality. What matters instead is that the recipient of the income is able to control or utilize that money even when it
What Are Consumer Cyclicals? Consumer cyclicals are a category of stocks that rely heavily on the business cycle and economic conditions. Consumer cyclicals include industries such as automotive, housing, entertainment, and retail. The category can be further divided into durable and non-durable sections: Durable cyclicals include physical goods such as hardware or vehicles while non-durables represent
