What Is a Cash Balance Pension Plan? A cash balance pension plan is a defined-benefit pension plan with the option of a lifetime annuity. The employer credits a participant’s account with a set percentage of their yearly compensation plus interest charges for a cash balance plan. The funding limits, funding requirements, and investment risk are based
What Does Cash Basis Mean? Cash basis refers to a major accounting method that recognizes revenues and expenses at the time cash is received or paid out. This contrasts accrual accounting, which recognizes income at the time the revenue is earned and records expenses when liabilities are incurred regardless of when cash is received or
What Is a Cash Basis Loan? A cash basis loan is one in which interest is recorded as earned when payment is collected. Ordinarily, interest income is accrued on loans, as regular payment of both principal and interest is assumed. However, in the case of nonperforming loans (or loans gone bad), continuing payments are doubtful.
What Is a Cash Budget? A cash budget is an estimation of the cash flows of a business over a specific period of time. This could be for a weekly, monthly, quarterly, or annual budget. This budget is used to assess whether the entity has sufficient cash to continue operating over the given time frame. The
What Is a Cash Charge? A cash charge is a charge against a company’s earnings that is accompanied by a cash outflow. Key Takeaways A cash charge is a charge against a company’s earnings that reduces net income and is accompanied by a cash outflow.They are often linked to cash payments facilitating restructuring, downsizing, and general efforts
What Is Cash Collateral? Cash collateral is cash and equivalents collected and held for the benefit of creditors during Chapter 11 bankruptcy proceedings. Cash and cash equivalents include negotiable instruments, documents of title, securities, and deposit accounts. Unless a court orders otherwise, cash collateral is separated from other assets for the purposes of paying creditors.
What Is a Cash Commodity? A cash commodity is a tangible product to be delivered in exchange for payment and is seen most frequently with futures options. A contract for a cash commodity will specify the exact amount of the commodity which is expected to be delivered, along with the delivery date, and the price.
What Is Cash Concentration and Disbursement (CCD)? Cash concentration and disbursement is a type of electronic funds transfer typically used to transfer funds among commercial business accounts. Funds can be consolidated from various locations and so-called concentrated into a single collection account. Funds can also be quickly and easily disbursed to intra-accounts, vendors, or accounts payable
What Is a Cash Contract? A cash contract is a financial agreement in which one party agrees to purchase a specified quantity of a commodity on a predetermined date. Unlike futures contracts in which the purchaser often closes out their contract for cash prior to the delivery date, the buyer in a cash contract always
What Is a Cash Discount? Cash discounts refer to an incentive that a seller offers to a buyer in return for paying a bill before the scheduled due date. In a cash discount, the seller will usually reduce the amount that the buyer owes by either a small percentage or a set dollar amount. Key
