What Is an Accredited Asset Management Specialist (AAMS)? The Accredited Asset Management Specialist (AAMS) is a professional designation awarded by the College for Financial Planning to financial professionals who complete a self-study program, pass an exam, and agree to comply with a code of ethics. Successful applicants earn the right to use the AAMS designation
What Does Accredited in Business Valuation Mean? Accredited in Business Valuation (ABV) is a professional designation awarded to a certified public accountant (CPA), who specializes in calculating businesses’ value. The ABV certification is overseen by the American Institute of Certified Public Accountants (AICPA). It requires candidates to complete an application process, pass an exam, meet
What Is an Accredited Investor? An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities. They are entitled to this privileged access by satisfying at least one requirement regarding their income, net worth, asset size, governance status, or professional experience. In
What Is an Accreting Principal Swap? An accreting principal swap is a derivative contract in which two counterparties agree to exchange cash flows—usually a fixed rate for a variable rate, as with most other types of interest rate or cross-currency swap contracts. However, in this case, the notional principal amount increases over time on a
What Is Accretion? Accretion is the gradual and incremental growth of assets and earnings due to business expansion, a company’s internal growth, or a merger or acquisition. In finance, accretion is also the accumulation of the additional income an investor expects to receive after purchasing a bond at a discount and holding it until maturity.
What Is an Accretive Acquisition? An accretive acquisition increases the acquiring company’s earnings per share (EPS). Accretive acquisitions tend to be favorable for the company’s market price because the price paid by the acquiring firm is lower than the boost that the new acquisition is expected to provide to the acquiring company’s EPS. As a
What is Accrual Bond? An accrual bond defers periodic interest payments usually until maturity, much like a zero coupon bond, except the coupon rate is fixed to the principal value. Key Takeaways An accrual bond defers periodic interest payments usually until maturity, much like a zero coupon bond, except the coupon rate is fixed to
What Is Accrual Accounting? Accrual accounting is a financial accounting method that allows a company to record revenue before receiving payment for goods or services sold and record expenses as they are incurred. In other words, the revenue earned and expenses incurred are entered into the company’s journal regardless of when money exchanges hands. Accrual
What Are Accruals? Accruals are revenues earned or expenses incurred that impact a company’s net income on the income statement, although cash related to the transaction has not yet changed hands. Accruals also affect the balance sheet, as they involve non-cash assets and liabilities. For example, if a company has performed a service for a
What Is Accrual Swap? An accrual swap is a type of interest rate swap in which the interest on one side accrues only if certain conditions are met. Payment of interest in the accrual swap occurs if the reference rate is above or below a certain level. A reference rate is the benchmark interest rate
