What is Amortization of Intangible Assets? In this article, we will discuss the amortization of intangible assets. Intangible assets refer to assets of a company that are not physical in nature. They include trademarks, customer lists, goodwill, etc. Hence, they are not composed of parts or materials with a defined benefit or life span, which…
What is Risk Transfer? Risk transfer refers to a risk management technique in which risk is transferred to a third party. In other words, risk transfer involves one party assuming the liabilities of another party. Purchasing insurance is a common example of transferring risk from an individual or entity to an insurance company. How It…
What is a Succession Event? A succession event, in economic terms, is the occurrence of an event wherein one of the two parties involved take on the legal powers, assets, or obligations of the other party. Succession events usually occur when business or legal circumstances require the party involved to pass on its obligations, assets,…
What is the Annualized Income Installment Method (AIIM)? The Annualized Income Installment Method (AIIM) is a method used to calculate the amount of taxes payable by a business during a tax year. Taxes are typically paid in installments quarterly, but some businesses do not report uniform cash flows throughout the year. Many businesses are seasonal,…
What is an Appraisal Management Company (AMC)? An Appraisal Management Company (AMC) is a company that works independently as a middleman between real estate appraisers and lenders. In other words, they are a management company that will act on behalf of appraisal users. AMCs include a group of licensed or certified appraisers. The appraisers are…
What are Limited Liability Partnerships (LLPs)? Limited Liability Partnerships (LLPs) are a corporate business structure that enables entrepreneurs, professionals, and enterprises to provide services via commercially efficient vehicles suited to their requirements. LLPs offer flexibility in structure and operation, as members can internally organize themselves into a partnership based on limited liability of the partners….
What is Monetary Transmission Mechanism? The monetary transmission mechanism refers to the process through which monetary policy decisions affect economic growth, prices, and other aspects of the economy. The chart below illustrates a simplified monetary transmission mechanism, which will be further analyzed in this article. Central Bank Action Central banks throughout the world share similar…
What is Inflation Targeting? Inflation targeting is a common practice among central banks globally that aims to influence the level of prices in an economy through the use of several monetary policy tools. Creation of the Inflation-Targeting Framework The inflation-targeting framework currently implemented among most central banks was developed in New Zealand in 1988-89 when…
Functions of Money Money performs four main functions in today’s society. It mainly serves as: A medium of exchange A standard of deferred payment A store of wealth A measure of value Barter Economy In theory, people are generally able to exchange goods and services without the need for a monetary transaction between the parties…
What is a Funding Request? The funding request section of a business plan is an outline of the future funding requirements of a company. Usually, the time scale is limited to the next five years, especially in cases of startups with an uncertain future. Information needs to be provided about the company’s future financial plans,…
