Proprietorships
Assets minus liabilities of an entity; equals contributed capital plus retained earnings. See sole proprietor for another context.
Management's Discussion and Analysis (MD&A),
A discussion of management's views of the company's performance; required by the SEC to be included in the 10-K and in the annual report to shareholders. The information typically contains discussion of such items as liquidity, results of operations, segments, and the effects of inflation.
Fiscal year
A period of 12 consecutive months chosen by a business as the accounting period for annual reports, not necessarily a natural business year or a calendar year.
Accounting equation
Assets = Equities; Assets = Liabilities + Owners' equity.
Current amount
A valuation or basis using fair values or market values as of the balance sheet date, in contrast an historical cost.
Cost of sales
Generally refers to cost of goods sold, occasionally to selling expenses.
Net loss
The excess of all expenses and losses for a period over all revenues and gains of the period; negative net income.
Conceptual framework
A coherent system of interrelated objectives and fundamentals, promulgated by the FASB primarily through its SFAC publications, intended to lead to consistent standards for financial accounting and reporting. The IASB has a similar conceptual framework.
Public Company Accounting Oversight Board (PCAOB)
A board established by the Sarbanes-Oxley Act of 2002 that regulates the auditing profession and sets standards for audits of public companies. The SEC appoints its members and approves its budget. The PCAOB directly invoices publicly traded companies and their auditors to fund its operations.
