Author: Buy Khmer Book

Shares Authorized:​ Number of shares of stock provided for in the articles of INCORPORATION of a COMPANY.

Sale-Leaseback Transaction:​ Unit of EQUITY in a CORPORATION.

Settlement Method:​ Method of ACCOUNTING for SECURITIES whereby transactions are recorded on the date the securities settle by the delivery or receipt of securities and the receipt or payment of cash.

Serial Bond:​ BOND ISSUE, usually of a municipality, with various maturity dates scheduled at regular intervals until the entire issue is retired.

Separate Entity:​ A business that is treated as distinct from its creditors, customers, and owners.

Sensitivity Analysis:​ Study measuring the effect of a change in a variable on the RISK or PROFITABILITY of an INVESTMENT.

Selling, General, and Administrative (SG&A) Expenses:​ Grouping of expenses reported on a company’s PROFIT and LOSS statement between COST OF GOODS SOLDand INCOME deductions.

Sell Out:​ LIQUIDATION of a MARGIN ACCOUNT by a broker after a margin call has failed to produce additional EQUITY to bring the margin to the required level.

Self Employment Tax:​ Most individuals that are in business for themselves, such as SOLE PROPRIETORS, PARTNERS or independent contractor, are subject to self employment taxes. The taxes provide coverage for the self employed individual for social security (OASDI) and Medicare benefits (HI) similar to the taxes withheld by employers from wages it pays the employees.

Security:​ Any kind of transferable certificate of ownership including EQUITY SECURITIES and DEBT SECURITIES.

Securitization:​ Source of financing whereby an entity’s ASSETS (typically mortgage loans, lease obligations or other types of RECEIVABLES) are placed in a special purpose vehicle that issues SECURITIES collateralized by such assets.

Securities Industry Association (SIA):​ Trade group that represents broker-dealers.

Securities and Exchange Commission (SEC):​ Agency authorized by the United States Congress to regulate the financial reporting practices of most public corporations.

Securities and Commodities Exchanges:​ Organized, national EXCHANGES where securities, options, and futures contracts are traded by members for their own accounts and for the accounts of customers.

Secured Debt:​ DEBT guaranteed by the pledge of assets or other COLLATERAL.

Secured Bond:​ A BOND that gives the bondholders a pledge of certain company assets as a guarantee of repayment.

Secondary Market:​ EXCHANGES and OVER-THE-COUNTER markets where securities are bought and sold subsequent to original issuance, which took place in the primary MARKET.

SEC Registration Statement:​ DISCLOSURE document that must be filed with the SEC in connection with a public offering of SECURITIES, unless the offering is exempt.

SEC Filings:​ Financial and informational DISCLOSURES required by the SEC in order to comply with certain sections of the Securities Act of 1933 and the Securities and Exchange Act of 1934. Some of the more common filings that publicly owned companies must submit are the FORM 10-K, FORM 10-Q and FORM 8-K.

Seasonality:​ Variations in business or economic activity that recur with regularity as the result of changes in climate, holidays, and vacations.

Savings Bond:​ U.S. government BOND issued in face value denominations ranging from $50 to $10,000.

Sale-Leaseback Transaction:​ Sale of property by a seller who simultaneously leases the property back from the purchaser.

Safe Harbor Rule:​ Concept in statutes and regulations whereby a person who meets listed requirements will be preserved from adverse legal action. Frequently, safe harbors are used where a legal requirement is somewhat ambiguous and carries a risk of punishment for an unintended violation.

Routine Transactions:​ Recurring financial activities reflected in the accounting records in the normal course of business.

Risk-Adjusted Discount Rate:​ In portfolio theory and capital budget analysis, the rate necessary to determine the PRESENT VALUE of an uncertain or risky stream of INCOME; it is the RISK-free rate plus a risk premium that is based on an analysis of the risk characteristics of the particular INVESTMENT or project.

Risk Management:​ Process of identifying and monitoring business risks in a manner that offers a RISK / RETURN relationship that is acceptable to an entity’s operating philosophy.

Risk Averse:​ Term referring to the assumption that, given the same RETURN and different RISK alternatives, a rational investor will seek the SECURITY offering the least risk.

<span style="color: #ff0000"Risk:​ Measurable possibility of losing or not gaining value.

Right to Setoff:​ DEBTOR’S legal right, to discharge all or a portion of the DEBT owed to another party by applying against the debt an amount that the other party owes to the debtor.

Right of Rescission:​ Right granted by the Federal Consumer Credit Protection Act of 1968 to void a CONTRACT within three business days with full refund of any down payment and without penalty.

Review Report:​ See Accountants’ Report

Review Engagement:​ Agreement between a CERTIFIED PUBLIC ACCOUNTANT (CPA) and his or her client to perform a review.

Review:​ Accounting service that provides some assurance as to the reliability of financial information. In a review, a CERTIFIED PUBLIC ACCOUNTANT (CPA) does not conduct an examination under GENERALLY ACCEPTED AUDITING STANDARDS (GAAS).

Revenues:​ Sales of products, merchandise, and services; and earnings from INTEREST, DIVIDEND, rents.

Revenue Recognition:​ Method of determining whether or not income has met the conditions of being earned and realized or is realizable.

Return on Investment (ROI):​ Ratio measure of the profits achieved by a firm through its basic operations. An indicator of management’s general effectiveness and efficiency. The simplest version is the ratio of NET INCOME to total ASSETS.

Return on Assets:​ A measurement of a company’s PROFITABILITY or overall earning power, that is, how efficiently a company uses its assets to produce INCOME. It is found by dividing INCOME by average total assets.

Return:​ PROFIT on a securities or capital INVESTMENT, usually expressed as an annual percentage rate.

Retire:​ To take something, such as a BOND, out of circulation.

Retained Earnings Account:​ The ACCOUNT that reflects the stockholders’ claim to the assets earned from operations and reinvested in corporate operations.

Retained Earnings:​ Accumulated undistributed earnings of a company retained for future needs or for future distribution to its owners.

Retail Method:​ A way of estimating INVENTORY, used in retail business.

Restructuring:​ Reorganization within an entity. Restructuring may occur in the form of changing the components of CAPITAL, renegotiating the terms of DEBT agreements, etc.

Restricted Assets:​ Cash or other ASSETS whose use in whole or in part is restricted for specific purposes bound by virtue of contracted agreements.

Residual Value:​ The estimated NET scrap, salvage, or trade-in value of a TANGIBLE ASSET at the estimated date of disposal.

Resident Alien:​ This is an individual that is not a citizen, but who has a residence in the United States. They are taxed on all of their INCOME worldwide in the same manner a citizen of the United States is.

Reserve :​ ACCOUNT used to earmark a portion of EQUITY or fund balance to indicate that it is not available for expenditure. An obsolete term in the United States. More commonly used in Europe.

Research and Development Costs:​ The EXPENSE of FUNDING RESEARCH AND DEVELOPMENT (R&D).

Research and Development (R&D):​ Research is a planned activity aimed at discovery of new knowledge with the hope of developing new or improved products and services. Development is the translation of research findings into a plan or design of new or improved products and services.

Rescind:​ Cancel a CONTRACT agreement.

Required Rate of Return:​ RETURN required by investors before they will commit money to an INVESTMENT at a given level of risk.

Repurchase Agreement (Repos):​ Agreement whereby an institution purchases SECURITIES under a stipulation that the seller will repurchase the securities within a certain time period at a certain price.

Report Release Date:​ The date the company’s financial statements are issued.

Report:​ An oral or written description of something, such as a book, event, or situation.

Replacements:​ EXPENDITURES for making good or whole the portions of property that have deteriorated through use or have been destroyed through accident.

Repairs:​ EXPENDITURES made in order to keep property in good condition but that do not appreciably prolong the life or increase the value of the property.

Reorganization:​ This is a change in the businesses capital arrangements. If for a CORPORATION there are seven statutory options for reorganization that would cause the corporation and shareholders to not recognize any GAIN or LOSS on the exchange of stock.

Relevant Assertions:​ Assertions that have a meaningful bearing on whether the account is fairly stated.

Reinvestment Rate:​ RATE OF RETURN resulting from the reinvestment of the INTEREST from a BOND or other fixed-income SECURITY.

Reinsurance:​ Process by which an insurance company obtains insurance on its insurance claims with other insurers in order to spread the risk.

Regulated Investment Company (RIC):​ Commonly called a MUTUAL FUND, this is a domestic corporation that acts as an investment agent for its shareholders by typically investing in government and corporate securities and distributing the DIVIDENDS andINTEREST income earned from such investments. In order to be considered a RIC a CORPORATION must make an irrevocable election tax election in order to be treated as one.

Regressive Rate:​ Rate that decreases as the calculation base increases. Often used to describe taxes where the TAX rate paid decreases as the TAXABLE INCOME increases.

Registrar:​ Agency responsible for keeping track of the owners of bonds and the issuance of stock.

Refunding:​ Replacing an old DEBT with a new one, often in order to lower the INTEREST costs of the issuer.