What Is Abeyance? Abeyance is a situation in which the rightful owner of a property, office or title has not yet been decided. Key Takeaways Abeyance is when the rightful owner of a property or trust has not been decided or has not met the obligations required to inherit the property, such as age or
What Is Ability-To-Pay Taxation? The ability-to-pay philosophy of taxation maintains that taxes should be levied according to a taxpayer’s ability to pay. The idea is that people, businesses, and corporations with higher incomes can and should pay more in taxes. Key Takeaways The ability-to-pay principle holds that those who have a greater ability to pay
What Is an Abeyance Order? An abeyance order is a court order declaring that the legal right to property or claim is held in abeyance, or temporarily placed on hold until matters are resolved. Abeyance places the right to a property, title, or office in a state of expectancy, in which the claim is not
What Is the Ability to Repay? The ability to repay refers to an individual’s financial capacity to make good on a debt. In particular, the phrase “ability to repay” was used in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. It describes the requirement that mortgage originators substantiate that potential borrowers can afford
What Is an ABLE (Achieving a Better Life Experience) Account? An ABLE account is a tax-advantaged savings account available to individuals diagnosed with significant disabilities before age 26. Contributions can be made to the account by the beneficiary, friends, or family members, but the total annual contribution cannot exceed a certain limit, which is pegged to
What Is Activity-Based Management? Activity-based management (ABM) is a system for determining the profitability of every aspect of a business so that its strengths can be enhanced and its weaknesses can either be improved or eliminated altogether. Activity-based management (ABM), which was first developed in the 1980s, seeks to highlight the areas where a business
What Is the Abnormal Earnings Valuation Model? The abnormal earnings valuation model is a method for determining a company’s equity value based on both its book value and its earnings. Also known as the residual income model, it looks at whether management’s decisions will cause a company to perform better or worse than anticipated. The
What Is an Abnormal Return? An abnormal return describes the unusually large profits or losses generated by a given investment or portfolio over a specified period. The performance diverges from the investments’ expected, or anticipated, rate of return (RoR)—the estimated risk-adjusted return based on an asset pricing model, or using a long-run historical average or
What Is Above Par? Above par is a term used to describe the price of a bond when it is trading above its face value. A bond usually trades at above par when its income distributions are higher than those of other bonds currently available in the market. This occurs when interest rates have declined
What Is Abnormal Spoilage? Abnormal spoilage is the amount of waste or destruction of inventory that a firm experiences beyond what is expected in normal business operations or production processes. Abnormal spoilage can be the result of broken machinery or from inefficient operations, and it is considered to be at least partially preventable. In accounting
