Dictionary_of_Banking_and_Finance

A / s ŋ (ə)l e /, AA / d b(ə)l e /, AAA / tr p(ə)l e / noun letters that show how reliable a particular share, bond or company is considered to be

These bonds have a AAA rating.

‘…the rating concern lowered its rating to single-A from double-A, and its senior debt rating to triple-B from single-A’ [Wall Street Journal]

COMMENT: The AAA rating is given by Standard & Poor’s or by Moody’s, and indicates a very high level of reliability for a corporate or municipal bond in the US

A1 /e wɒn/ adjective ship which is A1 at Lloyd’s a ship which is in the best possible condition according to Lloyd’s Register

AAD abbreviation Arab accounting dinar

ABA abbreviation American Bankers Association

abandonment /ə b ndənmənt/ noun an act of giving up voluntarily something that you own, such as an option or the right to a property

abatement /ə be tmənt/ noun an act of reducing

ABA transit number / e bi etr nz t n mbə/ noun a number allo-

cated to an American financial institution, such as a bank (NOTE: The number

appears on US cheques in the top right-hand corner, above the ‘check routing symbol’.)

ABI abbreviation Association of British Insurers

above par /ə b v pɑ / adjective referring to a share with a market price higher than its par value

above the line /ə b v ðə la n/ adjective, adverb 1. COMPANIES forming part of normal income and expenditure before tax Exceptional items are noted above the line in company accounts. 2. relating to revenue items in a

government budget 3. ADVERTISING relating to advertising for which payment is made (such as an ad in a magazine or a stand at a trade fair) and for which a commission is paid to an advertising agency. Compare below the line

absolute / bsəlu t/ adjective complete or total

absolute monopoly / bsəlu t mə-

nɒpəli/ noun a situation where only one producer produces or only one supplier supplies something The company has an absolute monopoly of imports of French wine. The supplier’s absolute monopoly of the product meant that customers had to accept his terms.

absolute title / bsəlu t ta t(ə)l/ noun a form of ownership of a piece of land in which the owner’s right is guaranteed by being registered with the Land Registry (NOTE: Absolute title

also exists to leasehold land, giving the proprietor a guaranteed valid lease.)

absorb /əb zɔ b/ verb to take in a small item so that it forms part of a larger one overheads have absorbed all our profits all our profits have gone in paying overhead expenses to absorb a loss by a subsidiary to include a subsidiary company’s loss in the group accounts a business which has been absorbed by a competitor a small business which has been made part of a larger one

absorption /əb zɔ pʃən/ noun the process of making a smaller business part of a larger one, so that the smaller company in effect no longer exists

absorption costing /əb zɔ pʃənkɒst ŋ/ noun a form of costing for a

product that includes both the direct costs of production and the indirect overhead costs as well

absorption rate /əb zɔ pʃən re t/ noun a rate at which overhead costs are absorbed into each unit of production

abstract / bstr kt/ noun a short form of a report or document to make an abstract of the company accounts

a/c, acc abbreviation account

accelerate /ək seləre t/ verb 1. to make something go faster 2. to reduce the amount of time before a maturity date

accelerated depreciation /ək-

seləre t d d pri ʃ e ʃ(ə)n/ noun a system of depreciation which reduces the value of assets at a high rate in the early years to encourage companies, as a result of tax advantages, to invest in new equipment

COMMENT: This applied in the UK until 1984; until then companies could depreciate new equipment at 100% in the first year of purchase.

acceleration /ək selə re ʃ(ə)n/ noun the act of making an unpaid balance or bond repayment become payable immediately

accept /ək sept/ verb 1. to take something which is being offered to accept delivery of a shipment to take goods into the warehouse officially when they are delivered 2. to say ‘yes’ or to agree to something She accepted the offer of a job in Australia. He accepted £2000 in lieu of notice. 60% of shareholders have accepted the offer.

acceptable /ək septəb(ə)l/ adjective which can be accepted Both parties found the offer acceptable. The terms of the contract of employment are not acceptable to the candidate. The offer is not acceptable to the shareholders.

acceptance /ək septəns/ noun 1. the act of signing a bill of exchange to show that you agree to pay it to present a bill for acceptance to present a bill for payment by the person who has accepted it 2. acceptance of an offer the act of agreeing to an offer to give an offer a conditional acceptance to accept an offer provided that specific things happen or that specific terms apply we have their letter of acceptance we have received a letter from them accepting the offer 3. a bill which has been accepted 4. the act of accepting

an offer of new shares for which you have applied

acceptance credit /ək septənskred t/ noun an arrangement of credit from a bank, where the bank accepts bills of exchange drawn on the bank by the debtor: the bank then discounts the bills and is responsible for paying them when they mature; the debtor owes the bank for the bills but these are covered by letters of credit

acceptance sampling /ək septənssɑ mpl ŋ/ noun the process of testing a small sample of a batch to see if the whole batch is good enough to be accepted

accepting house /ək sept ŋ haυs/, acceptance house /ək septəns haυs/

noun a firm (usually a merchant bank) which accepts bills of exchange (i.e. promises to pay them) at a discount, in return for immediate payment to the issuer, in this case the Bank of England

Accepting Houses Committee

/ək sept ŋ haυz z kə m ti/ noun the main London merchant banks, which organise the lending of money with the Bank of England. They receive slightly better discount rates from the Bank.

acceptor /ək septə/ noun a person who accepts a bill of exchange by signing it, thus making a commitment to pay it by a specified date

access / kses/ noun to have access to something to be able to obtain or reach something She has access to large amounts of venture capital. verb to call up data which is stored in a computer She accessed the address file on the computer.

Access / kses/ a credit card system formerly operated by some British banks, part of the MasterCard network

access fee / kses fi / noun a fee charged to bank customers for using online services

access time / kses ta m/ noun the time taken by a computer to find data stored in it

accident insurance / ks d(ə)nt

n ʃυərəns/ noun insurance which will pay the insured person when an accident takes place

accident policy / ks d(ə)ntpɒl si/ noun an insurance contract

time We allow dividends to accumulate in the fund.

accumulated depreciation /ə-

kju mjυle t d d pri ʃi e ʃ(ə)n/ noun the total amount by which an asset has been depreciated since it was purchased

accumulated profit /ə-

kju mjυle t d prɒf t/ noun a profit which is not paid as dividend but is taken over into the accounts of the following year

accumulated reserves /ə-

kju mjυle t d r z% vz/ plural noun reserves which a company has put aside over a period of years

accumulation /ə kju mjυ le ʃ(ə)n/ noun the process of growing larger by being added to, or of getting more and more of something

accumulation unit /ə kju mjυ-

le ʃ(ə)n ju n t/ noun a type of unit in a unit trust, which produces dividends which are used to form more units (as opposed to an income unit, which produces dividends which the investor receives as income)

ACD abbreviation authorized corporate director

ACH abbreviation US automated clearing house

achieve /ə tʃi v/ verb to succeed in doing something, to do something successfully The company has achieved great success in the Far East. We achieved all our objectives in 2001.

‘…the company expects to move to profits of FFr 2m next year and achieve equally rapid growth in following years’ [Financial Times]

acid test ratio / s d test re ʃ əυ/ noun same as liquidity ratio

ACP state noun an African, Caribbean and Pacific state which is linked to the European Community through the Lomé Convention (1985)

acquire /ə kwa ə/ verb to buy to acquire a company We have acquired a new office building in the centre of town.

acquirer /ə kwa ərə/ noun a person or company which buys something

acquisition / kw z ʃ(ə)n/ noun something bought The chocolate factory is our latest acquisition. The company has a record of making profit-

able acquisitions of traders in the retail sector.

acquisition accounting / kw -

z ʃ(ə)n ə kaυnt ŋ/ noun a full consolidation, where the assets of a subsidiary company which has been purchased are included in the parent company’s balance sheet, and the premium paid for the goodwill is written off against the year’s earnings

across-the-board /ə krɒs ðə bɔ d/ adjective applying to everything or everyone an across-the-board price increase or wage increase

across-the-board tariff increase

/ə krɒs ði bɔ d t r f nkri s/ noun an increase in duty which applies to a whole range of items

act / kt/ noun a law passed by parliament which must be obeyed by the people verb 1. to work He has agreed to act as an agent for an American company. The solicitor is acting for us or on our behalf. 2. to do something The board will have to act quickly if the company’s losses are going to be reduced. to act on something to do what you have been asked to do by someone to act on a letter The lawyers are acting on our instructions.

ACT abbreviation Advance Corporation Tax

action / kʃən/ noun 1. a thing which has been done to take action to do something You must take action if you want to stop people cheating you. 2. to take industrial action to do something (usually to go on strike) to show that you are not happy with conditions at work 3. a case in a law court where a person or company sues another person or company to take legal action to sue someone an action for libel or a libel action an action for damages She brought an action for wrongful dismissal against her former employer.

active / kt v/ adjective involving many transactions or activities an active demand for oil shares an active day on the Stock Exchange Computer shares are very active.

active account / kt v ə kaυnt/ noun an account, such as a bank account or investment account, which is used (i.e. money is deposited and withdrawn) frequently