What Is a Back-Door Listing? In finance, the term “back-door listing” refers to an alternative strategy used by private companies that wish to become publicly traded. One such strategy consists of acquiring an existing publicly-traded company, and then continuing to operate under the acquired company’s ticker symbol. Although back-door listings can be more economical than
What Is a Backdoor Roth IRA? A backdoor Roth IRA is a strategy rather than an official type of individual retirement account. It is a technique used by high-income earners—who exceed Roth IRA income limits—to convert their traditional IRA to a Roth IRA. The backdoor Roth IRA strategy is not a tax dodge. When you transfer the assets
What Is a Back-End Load? A back-end load is a fee paid by investors when selling mutual fund shares, and it is expressed as a percentage of the value of the fund’s shares. A back-end load can be a flat fee or gradually decrease over time, usually within five to ten years. In the latter
What Is a Back-End Plan? A back-end plan is an anti-acquisition strategy in which the target company provides existing shareholders—with the exception of the company attempting the takeover—with the ability to exchange existing securities for cash or other securities valued at a price determined by the company’s board of directors. A back-end plan, also known
What Is a Back Fee? A back fee is a payment made to the writer of a compound option when and if the first option is exercised. Since a compound option is an option contract to buy another option, only the premium on the first option is paid upfront. If the first option is then exercised, the premium
What Is a Backflip Takeover? A backflip takeover is a rare type of takeover that occurs when an acquirer becomes a subsidiary of the company it purchased. Upon completion of the deal, the two entities join forces and retain the name of the company that was bought. Key Takeaways A backflip takeover is a rare type of takeover that
What Is Backflush Costing? Backflush costing is a product costing system generally used in a just-in-time (JIT) inventory system. In short, it is an accounting method that records the costs associated with producing a good or service only after they are produced, completed, or sold. Backflush costing is also commonly referred to as backflush accounting. Key
What Is Backing Away? The term backing away refers to the failure by a market maker in a security to honor the quoted bid and ask prices for a minimum quantity. Backing away constitutes a serious violation of industry regulations. The Financial Industry Regulatory Authority (FINRA) uses an automated market surveillance system to enable the
What Is a Backlog? A backlog is a buildup of work that needs to be completed. The term “backlog” has a number of uses in accounting and finance. It may, for example, refer to a company’s sales orders waiting to be filled or a stack of financial paperwork, such as loan applications, that needs to be
What Are Back Months? In the commodity futures markets, the term “back months” refers to the futures contracts whose delivery dates are relatively far in the future. By contrast, so-called front months are those closest to the present date. Key Takeaways Back month futures contracts are those whose delivery date is among the latest available.They
