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Glossory
Glossory
ACCEPTANCES
Promise to pay created when the drawee of a time draft stamps or writes the words accepted above his signature and a designated payment date.
ACCRUAL BASIS
Recognizing the effects of transactions and other events when they occur without waiting for receipt or payment of cash or its equivalent.
(b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and (c) it is settled at a future date.
CONTINGENCIES
A condition or situation existing at Balance Sheet date where the outcome will be confirmed only by occurrence of one or more future events.
EQUITY METHOD
A method of accounting whereby the investment is initially recorded at cost and adjusted thereafter for the post acquisition change in the investors share of net assets of the investee. The Income Statement reflects the investors share of the results of operations of the investee.
FINANCE LEASE
A contract whereby a lessor conveys to the lessee the right to use an asset for rent over an agreed period of time which is sufficient to amortise the capital outlay of the lessor. The lessor retains ownership of the asset but transfers substantially all the risks and rewards of ownership to the lessee.
DEFERRED TAXATION
Sum set aside for tax in the Financial Statements that will become payable in a financial year other than the current financial year.
CASH EQUIVALENTS
Short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
DERIVATIVES
Derivative is a financial instrument or other contract which has the following characteristics: (a) its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the underlying);
GROSS DIVIDENDS
The portion of profits distributed to the shareholders including the tax withheld.