Provision and Real: Difference between pages

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1. ''Accounting - noun''.  
1. A term which has been restated to exclude the effects of inflation.  For example, if £100 is invested for a year at a nominal rate of 10% and inflation is 2%, we can say that the nominal rate is 10% but the real rate is only (1.10/1.02) - 1 = 7.84%. This is because goods which cost £100 today will cost £102 in a year's time.
Therefore only a 7.84% return has been made if we take into account the new prices of goods.


A form of liability where there is uncertainty as to the amount and timing of final settlement.
2. Inflation-proof.


Relevant accounting standards include IAS 37 and Section 21 of FRS 102.
3. Tangible. For example the ''real assets'' of a business would include its stock, plant and machinery.


4. ''Real property'' means land and buildings.


2. ''Accounting - noun''.
5. Real-life issues and opportunities are those with a strong foundation in practical experience. (Contrasted with other issues which are considered to be more theoretical.)
 
A reduction in the carrying amount, or net book value, of an asset to recognise an estimated reduction in value.
 
Examples include bad debt provisions and provisions for depreciation.
 
 
3. ''Accounting - verb''.
 
To create an accounting provision, or increase the amount of a provision.
 
 
4. ''Law''.
 
A significant individual part of a law, for example a tax anti-avoidance provision.
 
 
5. ''Contract law''.
 
A significant individual part of a contract, for example a clause or a term in a contract.


6. ''Options''. Relating to an operational decision or outcome.


== See also ==
== See also ==
* [[Accrual]]
* [[Nominal]]
* [[Anti-avoidance provision]]
* [[Real option]]
* [[Bad debt provision]]
* [[Real rate]]
* [[Book reserve]]
* [[Call provision]]
* [[Carrying amount]]
* [[Contract]]
* [[Depreciation]]
* [[FRS 102]]
* [[General provision]]
* [[IAS 37]]
* [[Liabilities]]
* [[Make whole provision]]
* [[Net book value]]
* [[Term]]
* [[Zero rate provision]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]

Revision as of 14:20, 23 October 2012

1. A term which has been restated to exclude the effects of inflation. For example, if £100 is invested for a year at a nominal rate of 10% and inflation is 2%, we can say that the nominal rate is 10% but the real rate is only (1.10/1.02) - 1 = 7.84%. This is because goods which cost £100 today will cost £102 in a year's time. Therefore only a 7.84% return has been made if we take into account the new prices of goods.

2. Inflation-proof.

3. Tangible. For example the real assets of a business would include its stock, plant and machinery.

4. Real property means land and buildings.

5. Real-life issues and opportunities are those with a strong foundation in practical experience. (Contrasted with other issues which are considered to be more theoretical.)

6. Options. Relating to an operational decision or outcome.

See also


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