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Intercompany loan definition

Accounting Tools

Related AccountingTools Courses Business Combinations and Consolidations Corporate Cash Management Corporate Finance When an intercompany loan is created, it should be fully documented, including the amount of the interest rate to be charged and principal repayment terms.

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Original issue discount definition

Accounting Tools

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is an Original Issue Discount? In addition, the investor may pay taxes on the actual interest income received, and on any realized appreciation in the market price of the underlying bond.

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Tax anticipation note definition

Accounting Tools

What is a Tax Anticipation Note? Tax anticipation notes are used by state and local governments to obtain financing before tax revenues have been received. When the issuing government entity eventually receives tax revenues, the resulting funds are used to retire the tax anticipation notes. Reduced risk.

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Financial leverage definition

Accounting Tools

Related Courses Corporate Finance The Interpretation of Financial Statements Treasurer's Guidebook What is Financial Leverage? Second, interest expense is tax deductible in many tax jurisdictions, which reduces the net cost of debt to the borrower. Financial leverage is the use of debt to buy more assets.

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Simple rate of return definition

Accounting Tools

Related Courses Capital Budgeting Corporate Finance Treasurer's Guidebook What is the Simple Rate of Return? Related Articles After-Tax Real Rate of Return Average Rate of Return Effective Rate of Return How to Calculate the Internal Rate of Return Incremental Internal Rate of Return Return on Investment

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Interest earned definition

Accounting Tools

Related Courses Corporate Cash Management Corporate Finance Investing Guidebook What is Interest Earned? These differences in definition can mean that interest earned is recognized later under the cash basis of accounting than under the accrual basis.

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Reverse leverage definition

Accounting Tools

To do so, he takes on a loan that has a net after-tax cost of 8%. After one year, he finds that the actual net after-tax return on his purchase of the manufacturing company is just 3%. Related AccountingTools Courses Corporate Finance Financial Analysis The Interpretation of Financial Statements Related Article Leverage Ratios