Terms starting with
Leveraged Buyout
A leveraged buyout is the acquisition of a company using significant borrowed funds, often secured by the target’s assets. Accounting for an LBO involves recognizing…
READ MORELoss Ratio
Loss ratio measures the proportion of claims paid by an insurer relative to premiums earned. It evaluates underwriting performance and risk management efficiency. A higher…
READ MOREListing Requirements
Listing requirements are financial and governance standards companies must meet to trade securities on a stock exchange. They often include minimum capital thresholds, regular disclosures,…
READ MORELoan Amortization
Loan amortization is the systematic repayment of a loan through scheduled installments covering both principal and interest. An amortization schedule outlines how each payment reduces…
READ MORELong-term Provision
Long-term provision represents an estimated obligation expected to be settled beyond one year. Examples include environmental cleanup costs or warranty liabilities extending over several years.…
READ MORELoss Contingency
Loss contingency is a potential financial loss that depends on the outcome of a future event, such as a lawsuit or regulatory penalty. If probable…
READ MORELevel of Materiality
Level of materiality refers to the threshold at which financial information becomes significant enough to influence users’ decisions. Auditors determine materiality during planning to focus…
READ MORELegal Reserve
Legal reserve is a portion of a company’s profits set aside to meet statutory or regulatory requirements. Some jurisdictions mandate transferring a percentage of annual…
READ MORELedger Posting
Ledger posting is the process of transferring recorded journal entries into individual accounts within the general ledger. It ensures that each account reflects cumulative debit…
READ MORELife Cycle Costing
Life cycle costing analyses the total cost of owning, operating, maintaining, and disposing of an asset over its useful life. It supports better investment decisions…
READ MORELabour Cost Variance
Labour cost variance measures the difference between the standard labour cost and the actual labour cost incurred. It helps identify inefficiencies in production, workforce performance,…
READ MORELoan Covenant
A loan covenant is a condition or restriction set by lenders to ensure borrowers maintain financial discipline. Covenants may require maintaining certain ratios or limit…
READ MORELiquidity Ratio
A liquidity ratio evaluates a company’s ability to meet short-term obligations using its current assets. Common examples include the current ratio and quick ratio. These…
READ MORELetter of Engagement
A letter of engagement outlines the scope, terms, and responsibilities of an accounting or auditing engagement between a firm and its client. It sets clear…
READ MORELease Accounting
Lease accounting records the financial impact of lease agreements. Under modern standards (like IFRS 16), lessees must recognise leased assets and liabilities on the balance…
READ MORELeverage Ratio
The leverage ratio measures how much of a company’s assets are financed through debt. It helps assess financial stability and risk exposure. Common leverage ratios…
READ MORELedger Reconciliation
Ledger reconciliation is the process of comparing account balances in the general ledger with supporting records, such as bank statements or sub-ledgers, to ensure accuracy.…
READ MORELump-Sum Purchase
A single payment made to buy multiple assets in one transaction, such as buying land and a building together. The total cost must be allocated…
READ MORELong-Term Debt
Financial obligations due more than one year from the reporting date. It includes bonds, bank loans, or lease obligations. Long-term debt appears on the balance…
READ MORELiquidation
The process of closing a business and distributing its assets to creditors and owners. Assets are sold to pay off liabilities. Any remaining funds go…
READ MORELiquid Assets
Assets that can be quickly converted into cash without losing value. Examples include cash on hand, bank balances, and short-term investments. These are critical for…
READ MORELimited Partnership
A business structure with at least one general partner who manages the business and assumes full liability, and one or more limited partners who invest…
READ MORELIFO
An inventory valuation method where the most recently purchased items are recorded as sold first. During inflation, LIFO typically results in higher cost of goods…
READ MORELetter of Credit
Letter of credit is a financial document issued by a bank guaranteeing payment to a seller, provided certain conditions are met. Common in international trade,…
READ MORELodgements
Lodgements is a deposit made into a bank account, typically in the form of cash, checks, or electronic transfers. In bookkeeping, lodgements are recorded as…
READ MORELimited liability
A legal structure where business owners or shareholders are only responsible for company debts up to the amount they invested. Their personal assets are protected.…
READ MORELiability
Liability is an obligation a business owes to outsiders, such as debts, loans, or unpaid expenses. Liabilities can be current (due within a year) or…
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