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Lease Term
Lease term refers to the duration over which a lease agreement is in effect, including non-cancellable periods and optional extensions if reasonably certain. It determines how lease assets…
READ MORELiquidation Value
Liquidation value is the estimated amount that could be realised if a company’s assets were sold quickly, typically under distressed conditions. It is often lower…
READ MORELine of Credit
A line of credit is a flexible financing arrangement that allows businesses to borrow funds up to a predetermined limit as needed. Interest is charged…
READ MORELegder Balance
Ledger balance is the ending balance of an account in the general ledger after all debits and credits have been posted. It represents the official…
READ MORELogistic Cost
Logistics cost includes all expenses related to the movement, storage, and handling of goods within a supply chain. It covers transportation, warehousing, packaging, and distribution. Monitoring logistics costs…
READ MORELong-term Investment
Long-term investment refers to assets held for more than one year with the intention of generating returns over time, such as stocks, bonds, or property.…
READ MORELoan-to-Value Ratio
Loan-to-value ratio compares the amount of a loan to the value of the asset securing it. It is calculated by dividing loan amount by asset…
READ MORELoss Absorption Capacity
Loss absorption capacity refers to a company’s ability to withstand financial losses without becoming insolvent. It is influenced by equity, reserves, and earnings stability. This…
READ MORELoss Carry Forward
Loss Carry Forward allows businesses to apply current-period losses to offset taxable income in future periods. This reduces future tax liabilities and supports cash flow…
READ MORELiability Coverage Ratio
Liability Coverage Ratio measures a company’s ability to meet its total liabilities using available assets or income. It helps assess financial stability and solvency. A…
READ MORELending Rate
Lending rate is the interest rate charged by financial institutions on loans provided to borrowers. It influences borrowing costs and financial planning. Businesses monitor lending rates to…
READ MORELegal Expense
Legal expense includes costs incurred for legal services such as consultation, litigation, compliance, or contract drafting. These expenses are recorded in the income statement and…
READ MORELease Incentive
Lease incentive refers to benefits provided by a lessor to encourage a lessee to enter into a lease agreement, such as rent-free periods or cash…
READ MORELast Mile Cost
Last mile cost represents expenses incurred in delivering goods from the final distribution point to the end customer. It includes transportation, labour, and logistics coordination. This cost is significant…
READ MORELanded Cost
Landed cost refers to the total cost of acquiring goods, including purchase price, shipping, customs duties, insurance, and handling charges. It provides a complete view of actual inventory cost.…
READ MORELIFO (Last In, First Out)
A US-permitted inventory valuation method where the most recently acquired inventory is assumed to be sold first. LIFO is allowed under US GAAP but prohibited under IFRS.
READ MORELeveraged 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…
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