imported>Doug Williamson |
imported>Doug Williamson |
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| 1. ''Financial reporting - research and development.''
| | Money markets trade short-term financial instruments, generally with a life up to one year. |
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| The phases of a project generally include:
| | Securities are generally quoted on the basis of a simple nominal annual interest rate (or yield) or a simple nominal annual discount rate. |
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| :(1) Research. | | Important short term interest conventions are: |
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| :(2) Development.
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| :(3) Commercial production or use of the new or improved items in the market.
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| | For GBP yield instruments: Actual / 365 days. |
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| For the purposes of financial reporting, development is the ''application of research findings'' or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use.
| | So Simple periodic interest = Quoted nominal annual rate x (Actual days) / 365. |
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| Financial reporting standards generally require development costs to be capitalised only after technical and commercial feasibility of the asset for sale or use have been established. This means that the entity must (1) intend and be able to complete the intangible asset and either use it or sell it ''and'' (2) be able to demonstrate how the asset will generate future economic benefits.
| | <span style="color:#4B0082">'''Example 1'''</span> |
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| On the other hand, all ''research'' costs are expensed.
| | A 272 day GBP yield instrument quoted at 4% would pay periodic interest of: |
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| | = 4% x 272 / 365 |
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| Relevant accounting standards include IAS 38 and Section 18 of FRS 102.
| | = 2.9808% per 272 day period. |
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| 2. ''Information technology (IT).''
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| Design and implementation of IT solutions, generally including writing the related software code.
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| For example, ''end user development.'' | | For EUR, USD and most other currencies yield instruments: Actual / 360 days. |
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| | So Simple periodic interest = Quoted nominal annual rate x [Actual days] / 360. |
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| 3. ''International relations - sustainability.''
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| In the context of international relations, development often relates to a particular country or region and includes increasing:
| | <span style="color:#4B0082">'''Example 2'''</span> |
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| *Per capita income;
| | A 272 day USD yield instrument quoted at 4% pays periodic interest of: |
| *Participation in the international financial system; and
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| *Diversification of export goods.
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| | = 4% x 272 / 360 |
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| 4. ''Real estate.''
| | = 3.0222% per 272 day period. |
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| Real estate development means increasing the value of land and buildings by making improvements or putting up new or replacement buildings.
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| The block of land and improved - or completed - buildings is also sometimes known as a development.
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| 5. ''Learning and development.''
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| Enhancing personal skills and behaviours, especially through practice and the application of learning.
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| 6. ''Business development.''
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| Systematic work to increase business revenues sustainably over time.
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| More broadly, any significant change, or the activities that bring about the significant change.
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| == See also == | | == See also == |
| * [[Business development]] | | * [[Capital market]] |
| * [[Capitalise]] | | * [[Depo market]] |
| * [[Code]]
| | * [[International money market]] |
| * [[Continuing professional development]] (CPD)
| | * [[Market]] |
| * [[Developer]]
| | * [[Money market fund]] |
| * [[Development bank]]
| | * [[Money market fund reform: a light at the end of the tunnel?]] |
| * [[End user development]]
| | * [[Money market lines]] |
| * [[Expense]]
| | * [[Nominal annual rate]] |
| * [[FRS 102]]
| | * [[Simple interest]] |
| * [[GSMA]]
| | * [[Wholesale markets]] |
| * [[IAS 38]]
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| * [[Ideation]]
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| * [[Intangible assets]]
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| * [[Information technology]]
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| * [[Intellectual property]] (IP)
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| * [[International development agency]] | |
| * [[Learning and development]] | |
| * [[Mobile for Development]] (M4D) | |
| * [[Proof of concept]] | |
| * [[Research]] | |
| * [[Research & development]] (R&D) | |
| * [[Software]] | |
| * [[Sustainable Development Goals]] (SDGs) | |
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| [[Category:Accounting,_tax_and_regulation]] | | [[Category:Long_term_funding]] |
| [[Category:The_business_context]]
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| [[Category:Corporate_finance]]
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| [[Category:Investment]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]]
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| [[Category:Risk_frameworks]]
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| [[Category:Financial_products_and_markets]]
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Money markets trade short-term financial instruments, generally with a life up to one year.
Securities are generally quoted on the basis of a simple nominal annual interest rate (or yield) or a simple nominal annual discount rate.
Important short term interest conventions are:
1.
For GBP yield instruments: Actual / 365 days.
So Simple periodic interest = Quoted nominal annual rate x (Actual days) / 365.
Example 1
A 272 day GBP yield instrument quoted at 4% would pay periodic interest of:
= 4% x 272 / 365
= 2.9808% per 272 day period.
2.
For EUR, USD and most other currencies yield instruments: Actual / 360 days.
So Simple periodic interest = Quoted nominal annual rate x [Actual days] / 360.
Example 2
A 272 day USD yield instrument quoted at 4% pays periodic interest of:
= 4% x 272 / 360
= 3.0222% per 272 day period.
See also
