What Is a Carrying Charge? A carrying charge is a cost associated with holding a physical commodity or financial instrument. Examples of carrying charges include insurance costs, storage costs, and interest charges on borrowed funds. These costs are also sometimes referred to as an investment’s cost of carry. Since carrying charges increase the cost of
What Is a Carrying Charge Market? In a carrying charge market, the futures price of a commodity is higher than its spot price because of the costs—or “carrying charges”—associated with physically storing that commodity. In these markets, one can approximate the likely futures price of a commodity by taking its spot price and adding its
What Is Inventory Carrying Cost? Inventory carrying cost, or holding costs, is an accounting term that identifies all business expenses related to holding and storing unsold goods. The total carrying costs include the related costs of warehousing, salaries, transportation and handling, taxes, and insurance as well as depreciation, shrinkage, and opportunity costs. Key Takeaways Inventory
What Are Carrying Costs? Carrying costs, also known as holding costs and inventory carrying costs, are the costs a business pays for holding inventory in stock. A business can incur a variety of carrying costs, including taxes, insurance, employee costs, depreciation, the cost of keeping items in storage, the cost of replacing perishable items, and
What Is Carrying Value? Carrying value is an accounting measure of value in which the value of an asset or company is based on the figures in the respective company’s balance sheet. For physical assets, such as machinery or computer hardware, carrying cost is calculated as (original cost – accumulated depreciation). If a company purchases
What Is a Carryover Basis? A carryover basis is a method for determining the tax basis of an asset when it is transferred from one individual to another. A carryover basis is often used when one party leaves assets or property to another person as a gift. In this situation, the basis often remains the
What Is a Carryover Provision? A carryover provision—also known as a fourth-quarter deductible carryover—is a clause commonly found in health insurance contracts. The purpose of carryover provisions is to enable policyholders to reduce their out-of-pocket expenses in the following year by applying a portion of the current year’s claims against the next year’s deductible. Typically
What Is Carte Blanche? “Carte blanche” is a French term that means “blank document.” Carte blanche is commonly used in English to refer to a check that has been signed but does not have a dollar amount written in. The recipient of such a check then writes in whatever dollar amount he wants or needs.
A cartel is an organization created from a formal agreement between a group of producers of a good or service to control supply or to regulate or manipulate prices. A collection of independent businesses or countries that act together like a single producer, cartel members may agree on prices, total industry output, market shares, allocation
What Is a Carve-Out? A carve-out is the partial divestiture of a business unit in which a parent company sells a minority interest of a subsidiary to outside investors. A company undertaking a carve-out is not selling a business unit outright but, instead, is selling an equity stake in that business or relinquishing control of
