EIOPA and Prepayment: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Classify page.)
 
imported>Doug Williamson
(Layout.)
 
Line 1: Line 1:
European Insurance and Occupational Pensions Authority.
1. ''Banking''.
 
The non-contractual early repayment by bank customers of, for example, fixed rate mortgages.
 
 
2. ''Accounting''.
 
An amount paid in advance for a financial benefit, represented by an asset in the organisation's balance sheet.
 
It is a prepaid expense.
 
 
:<span style="color:#4B0082">'''''Example: Venue hire'''''</span>
 
:We book a venue for a function.
 
:And pay 50% of the hire fee in advance.
 
 
 
:The 50% paid in advance is an ASSET for us.
 
:We are going to enjoy the use of the venue in future, but it has already been paid for.
 
:So the 50% already paid represents a future economic benefit.
 




== See also ==
== See also ==
* [[European Insurance and Occupational Pensions Authority]]
* [[Accrual]]
* [[Average effective maturity]]
* [[Bookkeeping]]
* [[Early Repayment Charge]]
* [[Extension risk]]
* [[Prepaid expense]]
* [[Prepayment risk]]
* [[Prepayments]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]

Latest revision as of 00:50, 2 January 2021

1. Banking.

The non-contractual early repayment by bank customers of, for example, fixed rate mortgages.


2. Accounting.

An amount paid in advance for a financial benefit, represented by an asset in the organisation's balance sheet.

It is a prepaid expense.


Example: Venue hire
We book a venue for a function.
And pay 50% of the hire fee in advance.


The 50% paid in advance is an ASSET for us.
We are going to enjoy the use of the venue in future, but it has already been paid for.
So the 50% already paid represents a future economic benefit.


See also