Prepayment and Reconciliation: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Link with Average effective maturity page.)
 
imported>Doug Williamson
(Add link.)
 
Line 1: Line 1:
1. ''Banking''.
1. ''Cash management and accounting''.  


The non-contractual early repayment by bank customers of, for example, fixed rate mortgages.
A reconciliation is a quantified explanation of the differences between two related amounts.


Reconciliation checks are an important feature of internal control systems, to provide additional assurance about the completeness and accuracy of recording financial and other information.


2. ''Accounting''.


An amount paid in advance for a financial benefit, represented by an asset in the organisation's balance sheet.
A very important example is the reconciliation of bank statement balances with the amounts in the customer organisation's internal records.


Another common accounting example is the reconciliation of reported operating profit to net operating cash flows. 
This statement explains why the figure for accounting profit differs from the net operating cash flows for the same period. 
Each item contributing to the net difference is quantified within the reconciliation statement.
Another example is the comparison of a physical count of stock or other assets, compared with the amounts in financial or other records.
2.
More generally, a reconciliation is a quantified explanation of the change in any balance, over a time period.
''Sometimes abbreviated to 'rec'.''




== See also ==
== See also ==
* [[Average effective maturity]]
* [[Accounting records]]
* [[Bookkeeping]]
* [[Bank reconciliation]]
* [[Early Repayment Charge]]
* [[Cash flow]]
* [[Extension risk]]
* [[Cash management]]
* [[Prepayment risk]]
* [[Full reconciliation]]
* [[Prepayments]]
* [[Profit]]
* [[Tax reconciliation]]
 
[[Category:Accounting,_tax_and_regulation]]

Revision as of 15:46, 31 December 2020

1. Cash management and accounting.

A reconciliation is a quantified explanation of the differences between two related amounts.

Reconciliation checks are an important feature of internal control systems, to provide additional assurance about the completeness and accuracy of recording financial and other information.


A very important example is the reconciliation of bank statement balances with the amounts in the customer organisation's internal records.


Another common accounting example is the reconciliation of reported operating profit to net operating cash flows.

This statement explains why the figure for accounting profit differs from the net operating cash flows for the same period.

Each item contributing to the net difference is quantified within the reconciliation statement.


Another example is the comparison of a physical count of stock or other assets, compared with the amounts in financial or other records.


2.

More generally, a reconciliation is a quantified explanation of the change in any balance, over a time period.


Sometimes abbreviated to 'rec'.


See also