Remove Corporate Finance Remove Definition Remove Tax
article thumbnail

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.

Tax 40
article thumbnail

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.

professionals

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Maturity value definition

Accounting Tools

Fees and taxes. Related AccountingTools Course Corporate Finance The maturity value increases when the interest on the investment compounds at a rapid rate (such as monthly or quarterly), since interest is being calculated on a continually growing base.

article thumbnail

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.

article thumbnail

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

article thumbnail

Leverage definition

Accounting Tools

If they had instead invested $200,000 and the business had borrowed $800,000 to still achieve total financing of $1 million, the return on investment would now be 50% (though the after-tax cost of debt must also be considered).

article thumbnail

Municipal bond definition

Accounting Tools

This tax exemption makes municipal bonds an especially attractive investment for individuals with a high incremental tax rate. Advantages of Municipal Bonds The interest income that an investor receives from a municipal bond is exempt from federal taxation and may also be exempt from taxation at lower levels of government.