What is Indemnification? Indemnification is a legal agreement by one party to hold another party blameless – not liable – for potential losses or damages. It is similar to a liability waiver but is usually more specific, applicable only to particular items, circumstances, or situations, or in regard to a particular contract. Black’s Law Dictionary…
What is the Quality of Accounts Receivable? The quality of accounts receivable is the likelihood that the cash flows that are owed to a company in the form of receivables are going to be collected. Analyzing the quality of accounts receivables for a company is important in assessing its financial health. Understanding Accounts Receivables Accounts…
What is the Nonaccrual Experience Method (NAE)? The nonaccrual experience method (NAE) is a tax accounting procedure that the Internal Revenue Code (IRC) uses for handling bad debts. The procedure can only be applied to bad debts for services that were performed in a few select professions. Also, the company that the NAE method is…
What is a Capitalized Cost? A capitalized cost is a cost that is incurred from the purchase of a fixed asset that is expected to directly produce an economic benefit beyond one year or a company’s normal operating cycle. Types of Costs In accrual-based accounting, there are two ways of classifying costs: 1. Capitalized costs…
What is Voluntary Life Insurance? Voluntary life insurance is a financial security and protection policy that provides a cash payout to a beneficiary or beneficiaries upon the death of the policyholder who is insured. It represents an optional benefit that is offered by employers to their employees as part of a comprehensive group life and…
What is a Multilateral Development Bank (MDB)? A multilateral development bank (MDB) is a financial institution established by multiple member countries and falls under international law. The owners of multilateral development banks are a national government and other international institutions and organizations. The purpose of MDBs is to facilitate financing and provide advisory services for…
What is a Multiple Listing Service (MLS)? A multiple listing service (MLS) is a combination of services that real estate brokers use to exchange data and information regarding properties and appraisals. A modern MLS consists of software that allows real estate agents and brokers who are selling properties to find brokers of potential buyers and…
What is the Modified Dietz Method (MDM)? The Modified Dietz Method (MDM) is a method that is used to measure a portfolio’s historical returns based on a weighted calculation of its cash flows. MDM takes into account the timing of the cash flows and assumes that a constant rate of return is achieved over a…
What is the Mill Levy/Rate? The mill levy/rate is a form of a property tax that is based on a property’s assessed value. The mill levy’s traditionally been, and continues to be, expressed in “mills.” A mill is equal to $1 for each $1,000 in assessed property value (derived from the Latin word “mil,” meaning…
