LOAN LOSS PROVISION
An expense reserved for future losses on loan defaults. Banks assume a certain percentage of loans in the event of loan defaults. It is entered as an expense when computing pre-tax incomes. The loan loss provision guarantees the bank’s solvency and capitalization if and when defaults occur.
Also called valuation allowance or valuation reserve.
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Capital Commitment
Future capital payments that a firm has pledged to pay out on long-term assets over a particular time period. This also talks about the securities ...
Overwithholding
A term which refers to an excess amount of tax being withheld for an employee. It will be sent back as a refund to the taxpayer after he or she fil ...
Diluted Earnings Per Share - Diluted EPS
It is the measure of a company’s profits.
Covenant
Promise a firm made to an indenture or other formal debt agreement, stating some activities will or won’t be carried out. In finance, it freq ...
Gross Spread
Difference between the security price paid by the underwriter and the actual price charged to the public. The spread compensates the underwriters o ...
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