F – L
Face Value - Amount due at maturity from a bond or note.
Factoring - Selling a RECEIVABLE at a discounted value to a third party for cash.
Fair Market Value - Price at which property would change hands between a buyer and a seller without any compulsion to buy or sell, and both having reasonable knowledge of the relevant facts.
Filing of Returns - Taxpayers meeting statutory requirements MUST file various returns on the prescribed forms. They also must be filed timely or they may not be considered as filed.
Financial Institution - Organisation engaged in any of the many aspects of finance including commercial banks, investment banks, investment companies, and insurance companies.
Financial Statements - Presentation of financial data including BALANCE SHEETS, INCOME STATEMENTS and STATEMENTS OF CASH FLOW, or any supporting statement that is intended to communicate an entity’s financial position at a point in time and its results of operations for a period then ended.
First in, First out (FIFO) - ACCOUNTING method of valuing STOCK under which the costs of the first goods acquired are the first costs charged to EXPENSE. Commonly known as FIFO.
Fiscal Year - Period of 12 consecutive months chosen by an entity as its ACCOUNTING period which may or may not be a calendar year.
Fixed Asset – Any tangible ASSET with a life of more than one year used in an entity’s operations.
Floor - Term used when discussing STOCK. STOCK cannot be valued lower than the “floor” which is the net realisable value of the STOCK less an allowance for a normal profit margin.
Forecast - Prospective FINANCIAL STATEMENTS that are an entity’s expected financial position, results of operations, and CASH FLOWS.
Franchise - Legal arrangement whereby the owner of a trade name (franchisor) contracts with a party that wants to use the name on a non-exclusive basis to sell goods or services (franchisee). Frequently, the franchise agreement grants strict supervisory powers to the franchisor over the franchisee which, nevertheless, is an independent business.
Fraud - Wilful misrepresentation by one person of a fact inflicting damage on another person.
Fund Accounting - Method of ACCOUNTING and presentation whereby ASSETS and LIABILITIES are grouped according to the purpose for which they are to be used. Generally used by government entities and not-for-profit organisation.
Future Contract - Transferable agreement to deliver or receive during a specific future month a standardised amount of a commodity.
Gain - Excess of REVENUES received over costs relating to a specific transaction.
General Ledger - Collection of all ASSET, LIABILITY, owners EQUITY, REVENUE, and EXPENSE ACCOUNTS.
General Partnership - PARTNERSHIP with no limited partners.
Gift - A valid transfer of property from one taxpayer to another without consideration or compensation.
Going Concern - Assumption that a business can remain in operation long enough for all of its current plans to be carried out.
Going Public - Activities that relate to offering a private company’s shares to the general investing public.
Goodwill - Premium paid in the acquisition of an entity over the fair value of its identifiable tangible and intangible ASSETS less LIABILITIES assumed.
Grantee - Person to whom property is transferred.
Grantor - (1) Person who transfers property. (2) Person who creates a TRUST.
Gross Income - The beginning point for the determination of income, including income from whatever sources derived.
Guarantee - Legal arrangement involving a promise by one person to perform the obligations of a second person to a third person, in the event the second person fails to perform.
Head of Household - An individual entitled to special tax rates that fall midway between single rates and married filing joint rates, if they fit the qualifying profile.
Hedge - A financial term for a specific type of commodities planning and trading.
Historical cost - Original cost of an ASSET to an entity.
Holding Period - The time in which a taxpayer acquires property and the date on which it is sold.
Joint Return – A return filed by married taxpayers or surviving spouses.
Joint Venture - When two or more persons or organisations gather CAPITAL to provide a product or service. Often carried out as a PARTNERSHIP.
Journal - Any book containing original entries of daily financial transactions
Key Person Insurance - Business-owned life insurance contract typically on the lives of principal officers that normally provides for guaranteed death benefits to the company and the accumulation of a cash surrender value.
Last in, First out (LIFO) - ACCOUNTING method of valuing STOCK under which the costs of the last goods acquired are the first costs charged to EXPENSE. Commonly known as LIFO.
Lease - Conveyance of land, buildings, equipment or other ASSETS from one person (LESSOR) to another (LESSEE) for a specific period of time for monetary or other consideration, usually in the form of rent.
Leasehold - Property INTEREST that a LESSEE owns in the leased property.
Ledger - Any book of ACCOUNTS containing the summaries of DEBIT and credit entries.
Lessee - Person or entity that has the right to use property under the terms of a LEASE.
Lessor - Owner of property, the temporary use of which is transferred to another (LESSEE) under the terms of a LEASE.
Letter of Credit - Conditional bank commitment issued on behalf of a customer to pay a third party in accordance with certain terms and conditions. The two primary types are commercial letters of credit and standby letters of credit.
Liability - DEBTS or obligations owed by one entity (DEBTOR) to another entity (CREDITOR) payable in money, goods, or services.
Liquid Assets – Cash, cash equivalents, and marketable SECURITIES.
Liquidation - Winding up an activity by distributing its ASSETS to the appropriate parties and settling its DEBTS.
Long-Term Debt - DEBT with a maturity of more than one year from the current date.
Loss - Excess of EXPENDITURES over REVENUE for a period or activity. Also, for tax purposes, an excess of basis over the amount realised in a transaction.
