- all-inclusive approachA concept of income by which virtually all nonequity-based transactions and events are captured and reported in the income statement; the preferred approach for income theory
- amortized cost methodThe approach mandated for held-to-maturity securities; investments are reported at their cost with any premium or discount amortized over the life of the investment
- available-for-sale securitiesInvestments in debt that are neither "held-to-maturity" or "trading;" a default category that is accounted for at fair value with changes in value recognized in other comprehensive income
- consolidationTo prepare financial reports for a parent and subsidiary company as a single economic unit
- current operating approachA concept of income where income is limited to transactions related to central ongoing operations; not an acceptable approach for income theory
- discount on bondsThe difference between face value and issue price of a bond, where the issue price is less; causes the effective yield to be higher than that stated
- equity methodMethod to account for stock investment when significant influence is present; changes in equity of the investee are recognized by the investor on a pro rata basis
- goodwillThe excess of the purchase price of an acquired company over the fair value of the identifiable net assets acquired
- held-to-maturity investmentsInvestments purchased with intent to hold to maturity; usually investment in debt; accounted for by amortized cost method
- investeeThe company in which another has an investment
- issue priceThe amount a company receives in exchange for the initial issue of debt or other financial instrument
- other comprehensive incomeAn account for changes in value of available for sale securities; not part of net income but is included in the broader concept of total comprehensive income
- par value on bondsThe face or contract amount of a bond; the amount to be repaid at maturity along with any interest
- premium on bondsThe difference between face value and issue price of a bond, where the issue price is more; causes the effective yield to be lower than that stated
- significant influenceThe ability to sway management and decision making of another entity, but generally not enough to assert absolute control
- straight-line methodA method for amortizing premiums and discounts on bonds; the premium or discount is spread uniformly over the life of the bond as an adjustment of interest
- trading securitiesInvestments in debt acquired with the intent of generating profits by reselling the investment in the very near future; classified as current assets
