What Is an Accounting Currency? The accounting currency is the monetary unit used when recording transactions in a company’s general ledger, also commonly referred to as the company’s “books” or accounting records. The accounting currency may also be called the reporting currency. The accounting (reporting) currency is not necessarily the same as the functional or
What Is an Accounting Cushion? An accounting cushion is a term used to describe an intentionally excessive expense reported on a company’s financial statements in order to even out fluctuations in earnings across periods. Management can use these inflated numbers to artificially understate income by overstating liability or allowance accounts. Making larger provisions for profit-eroding
What Is the Accounting Cycle? The accounting cycle is a collective process of identifying, analyzing, and recording the accounting events of a company. It is a standard 8-step process that begins when a transaction occurs and ends with its inclusion in the financial statements. The key steps in the eight-step accounting cycle include recording journal
What Is an Accelerated Dividend? An accelerated dividend is a special dividend paid by a company ahead of an imminent change in the treatment of dividends, such as an adverse change in dividend taxation. Companies will also sometimes pursue an accelerated dividend strategy to drive growth by sending a signal to investors that the company
What Is an Accelerated Return Note (ARN)? An accelerated return note (ARN) is a short- to medium-term debt instrument which offers a potentially higher return linked to the performance of a reference index or stock. Key Takeaways An accelerated return note (ARN) is a type of structured investment product (SIP) that offers a potentially higher
What Is an Accelerated Share Repurchase (ASR)? An accelerated share repurchase (ASR) is an investment strategy where a publicly-traded company expeditiously buys back large blocks of its outstanding shares from the market by relying on a go-between investment bank to facilitate the deal. To initiate such a campaign, a company must first furnish upfront cash
What Is Accelerated Vesting? Accelerated vesting allows an employee to speed up the schedule for gaining access to restricted company stock or stock options issued as an incentive. The rate typically is faster than the initial or standard vesting schedule. Therefore, the employee receives the monetary benefit from the stock or options much sooner. If
What Is an Acceleration Clause? An acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if certain requirements are not met. An acceleration clause outlines the reasons that the lender can demand loan repayment and the repayment required. It is also known as
What Is an Acceleration Covenant? An acceleration covenant is a contract provision that allows a lender to demand a borrower to immediately repay a loan if specific requirements are not met. Also referred to as an acceleration clause, the acceleration covenant stipulates under what circumstances the lender can demand immediate loan repayment. Key Takeaways An acceleration
What is Accelerator Theory? The accelerator theory, a Keynesian concept, stipulates that capital investment outlay is a function of output. For example, an increase in national income, as measured by the gross domestic product (GDP), would see a proportional increase in capital investment spending. Key Takeaways The accelerator theory stipulates that capital investment outlay is
