Unsecured Loan – Definition

Definition of unsecured loan: a borrowing arrangement where the lender seeks no collateral or security over the assets of the borrower to repossess in the event that the borrower defaults …

Subsidiary – Definition

Definition of subsidiary: a company which is primarily owned by another company, rather than external shareholders. What is a subsidiary? A subsidiary is a descriptive term for a company in …

Outsourcing – Definition

Definition of outsourcing: The purchase of ready-made goods or services from other businesses rather than producing them in-house from scratch. What is outsourcing? In plain English, outsourcing is when a …

Liquidation – Definition

Definition of liquidation (business): The winding up of a company by realising the cash value of its assets to settle its liabilities. What is liquidation? Liquidation is a word which …

Accounting Definitions

This page holds our Financial Expert™ Definitions of accounting jargon and terms. Cut through accounting jargon with our explainers. Each definition page is much more than an accounting definition. Beyond …

Code of Ethics – Definition

Definition of code of ethics (business): A reference guide providing guidance to employees to help them understand expected behaviours and guide them through moral dilemmas. What is a code of …

Business Ethics – Definition

Definition of business ethics: A strand of applied ethics, which explores moral dilemmas and ethical decision-making in a business context. What is business ethics? Business ethics is a practical branch …

Break-Even Analysis – Definition

Definition of break-even: The point at which the net income generated from an investment decision has covered the costs. What is break-even analysis? Break-even analysis is a fairly straight forward …

Bankruptcy – Definition

Definition of bankruptcy: The legal process initiated when an individual or company is unable to repay their debts. What is bankruptcy? Bankruptcy means different things in different countries. Bankruptcy is …

Turnover – Definition

Definition of turnover (accounting): Income. Turnover is used interchangeably with revenue and gross income in the context of financial reporting. What is turnover? Turnover is an accounting term used most …

Overheads – Definition

Definition of overheads: A business cost which is not directly linked to production or the provision of a service. What are overheads? Overhead is a name given to the collection …

Liability – Definition

Definition of liability (accounting): A present obligation arising from past events. What is a liability? A liability is something a business will need to settle or pay in the future. …

Journal Entry – Definition

Definition of journal (accounting): An accounting record of a single transaction, in the ‘double entry’ accounting format. What is a journal? In simple English, a journal entry is an instruction …

Joint Venture – Definition

Definition of joint venture (business): A formal partnership between two independent organisations, which sees the partners share resources to achieve a common objective. Definition of joint venture (accounting): An arrangement …

Income – Definition

Definition of income (accounting): Income is also known as revenue or turnover, and represents the amount of money a business earns by providing products and services to customers. Definition of …

Gross Margin – Definition

Definition of gross margin: A ratio expressing gross profit as a percentage of revenue. Gross margin is also known as gross profit margin. How to calculate gross margin Here’s an …

Goodwill – Definition

Definition of goodwill (accounting): Goodwill represents the excess price for an asset over and above the identifiable fair value of an asset. What is goodwill? Goodwill is quite a complex …

Financial Statements – Definition

Definition of financial statements: A periodic report which discloses the financial performance and financial position of a company, along with other necessary disclosures. What are financial statements? Financial statements are …

Escrow – Definition

Definition of escrow: A neutral third party who stands between two transacting parties to provide assurance that both will honour their obligations. What does escrow mean? Not all third parties …

Equity – Definition

Definition of equity (finance): the element of a organisations total value which is attributable to its shareholders Definition of equity (accounting): the book value of assets minus liabilities. The net …

Capital Expenditure – Definition

Definition of capital expenditure (accounting): An outlay of a company’s funds on the purchase of equipment, tooling, machinery or sometimes property. Capital expenditure is often shortened to ‘capex’ when spoken …

Asset – Definition

Definition of asset: An asset is a contractual right to a future economic benefit. Informally, it can also refer to anything or anyone of value. What does asset mean? Said …