Tiếng anh chuyên ngành kế toán part 66

638
Glossary
Profit plan: A company’s total budget used in achieving a desired profit goal. Some-
times the term refers only to the operating budget, and sometimes it is used synony-
mously with the term master budget.
Prospectus: Part I of a Registration Statement filed by a company offering its secu-
rities to the public, which Registration Statement is filed with and must be approved
by the Securities and Exchange Commission. The Prospectus describes the registering
company, its business and finances, and the risk factors the company faces.
Proxy: The grant by a shareholder to another party of the right to vote the stock-
holder’s shares of stock.
Proxy contest: An attempt to gain control of a corporation by soliciting shareholder
votes.
Purchase method: After the acquisition, the target firm’s assets are put on the bid-
der’s balance sheet at their fair market value.
Put option: An asset that gives the owner the right but not the obligation to sell
some other asset for a set price on or up to a specified date.
RAM: Random access memory is the hardware which a computer uses for storing
programs and data that the computer is currently using. In human terms, you can
think of RAM as the memory storing part of your brain. When you are thinking about
a problem, you are using your own RAM to work through various calculations and
thoughts.
Rate of return: An amount of income (loss) and/or change in value realized or
anticipated on an investment, expressed as a percentage of that investment.
Red herring: A preliminary, nonfinal Prospectus distributed by underwriters for
the purpose of generating interest in shares of stock to be offered to the public.
Registration statement: A filing made with the SEC by a company issuing its secu-
rities to the public, which describes the company and its financial condition. Part I
consists of the Prospectus.
Regulation FD: A Securities and Exchange Commission Regulation which among
other matters requires a company which purposely or inadvertently releases previ-

ously unknown material information to promptly further distribute that information
to the public.
Regulation S-K: A Regulation of the Securities and Exchange Commission that sets
forth the standards for drafting the body of a Prospectus.
Regulation S-X: A Regulation of the Securities and Exchange Commission that sets
forth the standards for the preparation of financial statements to be included in doc-
uments filed with the Securities and Exchange Commission.
Remeasurement: See temporal translation procedure.
Reporting currency: The currency in which a firm prepares its financial statements.
Residual value: The prospective value as of the end of the discrete projection
period in a discounted benefit streams model.
Restructuring charges: Expenses typically recognized in conjunction with down-
sizings, reengineerings, reorganizations, and comparable activities. The expenses are
usually made up of cash costs, accruals of obligations for future expenditures, as well
as the write-down of assets.
Risk factors: That section of a Prospectus, or of a Form 10-K or other SEC filing,
which lists the operational and financial risks faced by a company.
Glossary
639
Risk-free rate: The rate of return available in the market on an investment free of
default risk.
Risk premium: A rate of return in addition to a risk-free rate to compensate the in-
vestor for accepting risk.
Road show: A trip, generally of two or more weeks’ duration, by underwriters and
company management to meet with underwriters, brokers, and investors in different
cities in order to explain a proposed public offering of securities.
Roll over: To enter a new future or forward contract to replace a contract that is
expiring.
ROM: Read-only memory are forms of data storage which cannot be written to (or
changed), but from which data can only be retrieved. A music CD (and, hence, CD

ROM) is a device from which you can play back music, but you cannot record your
own music to a CD ROM. (If you can record to a CD, the device is called a CD-R
(for recordable), not a CD ROM.)
Securities Act of 1933: The U.S. statute that permits the private placement or pri-
vate sale of securities without registration provided full and fair disclosure is made
and that requires the registration of public offerings of securities.
Securities and Exchange Commission (SEC): An agency of the U.S. government
which regulates the public issuance of securities under the Securities Act of 1933
and the conduct of trading markets and brokerage firms under the Securities Ex-
change Act of 1934, so as to protect investors from fraud and misleading or inade-
quate corporate and financial information.
Securities Exchange Act of 1934: The U.S. statute which established the Securi-
ties and Exchange Commission and regulates the operation of broker/dealers. Under
this statute, companies with publicly held securities are required to make periodic
reports to the public on various forms, most typically Forms 10-K, 10-Q, and 8-K. Of-
ficers, directors, and significant shareholders of publicly held companies are required
to report purchases and sales of securities and the formation of “groups” for the hold-
ing, voting, purchase, or sale of publicly traded securities.
Short: To enter a future or forward as the short party. Also known as “selling” the
future or forward.
Short party: The party in a forward or future contract that will deliver the under-
lying asset and receive payment (i.e., the selling party). The party in a forward or fu-
ture contract that benefits from a decline in the price of the underlying asset.
Single-step income statement: An income statement format that simply deducts
expenses and losses from revenues and gains in arriving at a single measure of income
from continuing operations.
Speculate: Attempt to profit by taking on a risk exposure.
Spot market: The market in which transactions are executed for immediate deliv-
ery of an asset.
Spot price: The price to be paid for immediate delivery of an asset or commodity.

Spot rate: Rate at which currencies are exchanged for immediate delivery.
Standard and Poor’s 500: A stock portfolio consisting of 500 large corporations.
The composition and value of the stock portfolio is tracked and reported by the Stan-
dard and Poor’s publishing company. The S&P 500 value is widely used as a bench-
mark index of overall stock market performance.
640
Glossary
Standard of value: The identification of the type of value being utilized in a spe-
cific engagement (e.g., fair market value, fair value, investment value).
Standards: Predetermined, expected levels of efficiency or measures of desired
performance (e.g., a budget amount, a standard cost, or a nonquantitative statement
of desired performance). A standard cost is the predetermined cost of an input per
unit of output. Standards may be unchanging (basic), perfect (ideal), or currently
attainable.
Statements of Financial Accounting Standards (SFAS): Pronouncements of
the Financial Accounting Standards Board that are the central elements of generally
accepted accounting principles.
Stock acquisition: The purchase of a controlling interest in a firm by buying its
outstanding equity.
Strategic information system: An application used by senior management to cre-
ate a company’s strategy.
Streaming media: Typically, refers to Internet sites that send out a continuous
flow of sound or video signal to user. An example might be www.radiotango.com,
which plays tangos 24 hours per day.
Strike price: The prespecified purchase or sale price for the underlying asset in an
option contract.
Sustainable earnings base: A revised historical earnings series from which the
effects of all nonrecurring items have been removed (see core earnings).
Sustainable earnings worksheet: A worksheet used to organize and summarize
nonrecurring items so that their effects can be removed from as-reported net income

in order to arrive at a sustainable earnings base.
Swap: An agreement between two parties to exchange cash flows over a period of
time. Cash flows are determined by an agreed upon formula specified in the swap
agreement—a formula that is contingent on the performance of other underlying
instruments.
Symmetric risk: An exposure that results in profits when an underlying price or
economic variable moves in one direction, and proportional losses if the variable
moves in the opposite direction.
Synergy: The incremental value generated by the combination of two or more firms.
Synthetic stock portfolio: A portfolio that consists of Treasury bills and a long
position in equity futures contracts. A properly constructed synthetic stock portfolio
behaves the same as a portfolio consisting of actual stocks.
Systematic risk: The risk that is common to all risky securities and cannot be elim-
inated through diversification. When using the capital asset pricing model, system-
atic risk is measured by beta.
Takeover: The transfer of corporate control from one group of shareholders to
another.
Target: A firm that is the subject of takeover or acquisition activities.
Tau: The amount of time remaining prior to an option’s expiration.
Taxable transaction: An acquisition in which the target firm shareholders are im-
mediately subject to capital gains on their sale of shares.
Glossary
641
Tax-adjusted nonrecurring items: Pretax nonrecurring items of revenue, gain,
expense, and loss that are multiplied by one minus a representative income tax rate.
The result is the after-tax effect of each of these items on net income.
Tax-free transaction: An acquisition in which the primary consideration paid to
the target’s shareholders is the acquirer’s common stock, thereby deferring capital
gains taxes until the new shares are sold.
TCP/IP: The communications standard that is used by the Internet. A protocol is

the understanding that computers have for how information will be delivered over
the communications network, which enables computers with different operating sys-
tems to communicate with each other and to eliminate errors in data.
Temporal (remeasurement) translation procedure: A method for translating
foreign currency financial statements in which monetary assets (including assets
valued at market) and liabilities are translated at current exchange rates. Nonmone-
tary assets, liabilities, and paid-in capital accounts are translated at historical ex-
change rates; cost of sales and depreciation expense are translated at the rates in
existence when the related inventory or fixed assets were acquired; and revenues
and other expenses are translated at the average exchange rate in existence during
the reporting period. Translation gains and losses are reported as a component of
net income.
Transaction exposure: The potential for gains and losses as foreign-denominated
assets and liabilities (e.g., accounts receivable, accounts payable, notes payable), in-
crease or decrease in value with changes in exchange rates.
Transfer prices: Prices charged when goods or services are transferred either
within firms (e.g., from one division of a firm to another) or between related firms
(e.g., between a parent and its subsidiaries).
Translation exposure: Typically, the excess of foreign-currency assets over foreign
currency liabilities of foreign subsidiaries. Translation gains result from increases in
the value of the foreign currency and losses in the event of decreases.
Translation of foreign currency financial statements: The restatement of the
financial statements of a foreign entity from its local currency to the reporting cur-
rency of its parent.
UNIX: An open operating system running on many manufacturers’ computers. The
first successful nonproprietary operating system. It was developed by Bell Labs in
the 1970s.
Unsystematic risk: The portion of total risk specific to an individual security that
can be avoided through diversification.
Unwind: To close out a future or forward position.

URL: Universal Resource Locator is the Internet address for a given Web site. The
URL for the president of the United States is www.whitehouse.gov.
Valuation date: The specific point in time at which the valuator’s opinion of value
applies (also referred to as “Effective Date” or “Appraisal Date”).
Variances: Measures of the difference between actual costs and standard costs.
They are favorable if costs are less than expected and unfavorable otherwise. Vari-
ances may be analyzed by the effect of changing prices (price variances) or changing
usage (quantity or usage variances).
642
Glossary
Vertical merger: A merger in which the two firms are from different stages of the
same industry or production process (e.g., an automobile manufacturer purchases a
steelmaker).
WA N : A wide area network is a connection of two or more computers which are geo-
graphically distant from each other. The typical purpose of a WAN is to send data or
communicate with distant facilities. Thus, an airline might have a WAN connecting
all of its airports world wide to allow for the quick communications of scheduling
changes between its various facilities.
Weighted average cost of capital (WACC): The cost of capital (discount rate) de-
termined by the weighted average, at market value, of the cost of all financing
sources in the business enterprise’s capital structure.
Windows NT or 2000: Quickly becoming the network operating system standard
of the industry. Developed by Microsoft.
Write an option: Sell an option. The writer is paid the option premium up front.
The writer of a call must later sell the underlying asset if the call option owner
exercises. The writer of a put must later buy the underlying asset if the put option
owner exercises. The writer of the option is essentially liable for any future payoffs
received by the option owner. Also known as shorting the option.