What Is a Statement of Financial Accounting Standards (SFAS)? Statements of Financial Accounting Standards (SFAS), published by the Financial Accounting Standards Board (FASB), provided guidance on a specific accounting topic, until 2009. SFAS laid the guidelines for accounting standards in the U.S. These SFAS were published in an effort to update the accounting industry on…
Do you routinely analyze your companies, but don’t look at how they account for their inventory? For many companies, inventory represents a large, if not the largest, portion of their assets. As a result, inventory is a critical component of the balance sheet. Therefore, it is important that serious investors understand how to assess the…
What Is a Normal-Course Issuer Bid (NCIB)? A normal-course issuer bid is a Canadian term for a public company’s repurchase of its own stock in order to cancel it. A company is allowed to repurchase between 5% and 10% of its shares depending on how the transaction is conducted. Key Takeaways An NCIB is a…
What Is a Commercial Package Policy (CPP)? A commercial package policy (CPP) is an insurance policy that combines coverage for multiple perils, such as liability and property risk. A commercial package policy allows a business to take a flexible approach to obtain insurance coverage. The benefit of CPP is that it may allow the business…
What Is a Reorganization? A reorganization is a significant and disruptive overhaul of a troubled business intended to restore it to profitability. It may include shutting down or selling divisions, replacing management, cutting budgets, and laying off workers. A supervised reorganization is the focus of the Chapter 11 bankruptcy process, during which a company is…
Economists traditionally use gross domestic product (GDP) to measure economic progress. If GDP is rising, the economy is in solid shape, and the nation is moving forward. On the other hand, if gross domestic product is falling, the economy might be in trouble, and the nation is losing ground. Two consecutive quarters of negative GDP typically…
A renounceable right is an offer issued by a corporation to shareholders to purchase more shares of the corporation’s stock, usually at a discount. This offer usually coincides with the company’s decision to issue a new round of stock, which would dilute the shareholders’ equity in the company. The renounceable right compensates the shareholders for…
The U.S. Federal Reserve controls the money supply in the United States, and while it doesn’t actually print currency bills itself, it does determine how many bills are printed by the Treasury Department each year. Key Takeaways The U.S. Federal Reserve controls the supply of money in the U.S., and when it expands that supply…
What Is IRS Publication 525? Publication 525, Taxable and Nontaxable Income, is a document published by the Internal Revenue Service (IRS) detailing what types of income taxpayers should consider taxable or nontaxable when filing tax returns. A taxpayer’s income can come from a number of sources other than regular employment. Income can be in the…