Term
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Definition
| a relationship between time and money |
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Term
| Present Value-Based Accounting Measurements: Notes |
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Definition
| valuing non-current receivables and payable that carry no stated interest rate or a lower than market interest rate. |
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Term
| Present Value-Based Accounting Measurements: Leases |
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Definition
| Valuing assets and obligations to be capitalized under long-term leases and measuring the amount of the lease payments and annual leasehold amortization. |
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Term
| Present Value-Based Accounting Measurements: Pensions and other Post-retirement Benefit |
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Definition
| measuring service cost components of employers' post-retirement benefits expense and obligations |
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Term
| Present Value-Based Accounting Measurements: Long-term assets |
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Definition
| evaluting alternative long-term investments by discounting future cash flows. determining the value of assets acquired under deferred payment contracts. measuring impairments of assets. |
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Term
| Present Value-Based Accounting Measurements: Stock-Based Compensation |
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Definition
| Determining the fair value of employee services in compensatory stock-option plans. |
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Term
| Present Value-Based Accounting Measurements: Business Combinations |
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Definition
| Determining the value of receivables, payables, liabilities, acrrruals, and commitment acquired or assumed in a "purchase." |
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Term
| Present Value-Based Accounting Measurements: disclosures |
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Definition
| measuring the value of future cash flows from oil and gas reserves for disclosure in supplementary information. |
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Term
| Present Value-Based Accounting Measurements: environmental liabilities |
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Definition
| determining the fair value of future obligation for asset retirements. |
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Term
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Definition
| payment for the use of money |
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Term
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Definition
| excess cash received or repaid over and above the amount lent or borrowed |
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Term
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Definition
| number of years or fractional portion of a year that the principal is outstanding |
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Term
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Definition
Interest= P * i * n
computed on the amount of principal only |
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Term
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Definition
| computed on the amount of principal and on any interest earned that has not been paid or withdrawn, may be compounded more than once a year |
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Term
| compound interest: compute total number of compounding periods |
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Definition
| multiply the number of years by the number of compounding periods per year |
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Term
| compound interest: compute compounding period interest rate |
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Definition
| divide annual interest rate by number of compounding periods per year |
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Term
Interest tables and their contents:
Future Value of 1 table |
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Definition
contains the amounts to which 1 will accumulate if deposited now at a specified rate and left for a specified number of periods.
-accumulation
FV= PV * (FVFn,i) |
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Term
Interest tables and their contents:
Present Value of 1 table |
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Definition
| contains the amounts that must be deposited at a specified rate of interest to equal 1 at the end of a specified number of periods. |
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Term
Interest tables and their contents:
Future value of an ordinary annuity of 1 table |
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Definition
| contains the amounts to which periodic rents of 1 will accumulate if the payments (rents) are invested at the end of each period at a specified rate of interest for a specified number of periods. |
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Term
Interest tables and their contents:
present value of an ordinary annuity of 1 table |
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Definition
| contains the amounts that must be deposited now at a specified rate of interest to permit withdrawals of 1 at the end of a regular periodic intervals for the specified number of periods. |
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Term
Interest tables and their contents:
Present value of an annuity due of 1 table |
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Definition
| contains the amounts that must be deposited now at a specified rate of interest to permit withdrawals of 1 at the beginning of regular periodic intervals for the specified number of periods. |
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Term
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Definition
| value at a future date of a given sum or sums invested assuming compound interest |
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Term
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Definition
| value now of a future sum or sums discounted assuming compound interest. |
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Term
Single-Sum Problems:
Unknown Future Value |
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Definition
| accumulate all cash flows to a future point, interest increases the amounts of values overtime so that the future value exceeds the present value |
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Term
Single-Sum Problems:
Unknown Present Value |
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Definition
discount all cash flows from the future to the present,
discounting reduces the amounts or values, so present value is less than future amount |
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Term
| Future Value of a Single Sum |
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Definition
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Term
| Present Value of a Single Sum |
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Definition
PVFn,i= 1/(1+i)^n
or
PV= FV (PVFn,i) |
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