Oklahoma Society of CPAs
Never Underestimate the Value
Never Underestimate the Value
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Instructions: Enter a search word or term and click go or click on a letter or number below. Click italicized words in definitions to pop up a definition of the italicized word.
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An S Corporation is a corporation which, under the Internal Revenue Code, is generally not subject to federal income taxes. Instead, taxable income of the corporation is passed through to its stockholders in a manner similar to that of a partnership.
Safe Harbor Rule
Concept in statutes and regulations whereby a person who meets listed requirements will be preserved from adverse legal action. Frequently, safe harbors are used where a legal requirement is somewhat ambiguous and carries a risk of punishment for an unintended violation.
Sale-Leaseback Transaction
Sale of property by a seller who simultaneously leases the property back from the purchaser.
Salvage Value
Selling price assigned to retired fixed assets
or merchandise unsalable through usual channels.
SAS
See Statements on Auditing Standards.
SEC
See Securities and Exchange Commission.
SEC Filings
Financial and informational disclosures
required by the SEC in order to comply with certain sections of the Securities Act of 1933 and the Securities and Exchange Act of 1934. Some of the more common filings that publicly owned companies must submit are the Form 10-K,
Form 10-Q
and Form 8-K.
SEC Registration Statement
Disclosure
document that must be filed with the SEC
in connection with a public offering of securities,
unless the offering is exempt.
Securities and Exchange Commission (SEC)
Agency authorized by the United States Congress to regulate the financial reporting practices of most public corporations.
Securitization
Source of financing whereby an entity's assets
(typically mortgage loans, lease obligations or other types of receivables
) are placed in a special purpose vehicle that issues securities
collateralized by such assets.
Security
Any kind of transferable certificate of ownership including equity securities
and debt securities.
Security Interest
Legal interest of one person in the property of another to assure performance of a second person under a contract.
Settlement Method
Method of accounting
for securities
whereby transactions are recorded on the date the securities settle by the delivery or receipt of securities and the receipt or payment of cash.
SFAS
See Statement of Financial Accounting Standards.
Short Sale
Sale of an item before it is purchased. A person entering into a short sale believes the price of the item will decline between the date of the short sale and the date he or she must purchase the item to deliver the item under the terms of the short sale.
Short-Term
Current; ordinarily due within one year.
Significant Accounts
An account is significant if there is more than a remote likelihood that the account could contain misstatements that individually or when aggregated with others, could have a material effect on the financial statements, considering the risks of both overstatement and understatement.
Significant Deficiency
A control deficiency or combination of control deficiencies, that adversely affects the company's ability to initiate, authorize, record, process or report external financial data reliably in accordance with GAAP
such that there is more than a remote likelihood that a misstatement of the company's annual or interim financial statements that is more than inconsequential will not be prevented or detected.
Significant Findings or Issues
Substantive matters that are important to the procedures performed, evidence obtained, or conclusions reached and include but are not limited to:
Single Audit Act
The Single Audit Act of 1984 and the Single Audit Act Amendments of 1996 establish requirements for audits of states, local governments, and nonprofit organizations that administer federal financial assistance programs above a certain threshold.
Sole Proprietorship
See Proprietorship.
Special Assessment
Charge made by a local government for the cost of an improvement or service. It is usually levied on those who will benefit from the service.
Special Report
Special report is a term applied to auditors' reports issued in connection with various types of financial presentations, including: Financial statements that are prepared in conformity with a comprehensive basis of accounting other than generally accepted accounting principles. Specified elements, accounts or items of a financial statement. Compliance with aspects of contractual agreements or regulatory requirements related to audited financial statements. Financial presentations to comply with contractual agreements or regulatory provisions. Financial information presented in prescribed forms or schedules that require a prescribed form of auditor's reports.
Spinoff
Transfer of all, or a portion of, a subsidiary's stock or other assets
to the stockholders of its parent company on a pro rata
basis.
Spot Market
Market for buying and selling commodities or financial instruments for immediate delivery and payment based on the settlement conventions of the particular market.
Spread
Difference between two prices, usually a buying and selling price.
SSARS
See Statements on Standards for Accounting and Review Services.
Start-up Costs
(1) Costs, excluding acquisition costs, incurred to bring a new unit into production. (2) Costs incurred to begin a business.
Stated Value
Per share amount set by the board of directors
to be placed in the capital stock
account upon issuance of no-par value.
Statement of Cash Flows
A statement of cash flows is one of the basic financial statements that is required as part of a complete set of financial statements prepared in conformity with generally accepted accounting principles. It categorizes net cash provided or used during a period as operating, investing and financing activities, and reconciles beginning and ending cash and cash equivalents.
Statement of Financial Accounting Standards (SFAS)
Statements issued by the Financial Accounting Standards Board (FASB).
Statement of Financial Condition
Basic financial statement,
usually accompanied by appropriate disclosures
that describe the basis of accounting
used in its preparation and presentation as of a specified date, the entity's assets,
liabilities
and the equity
of its owners. Also known as balance sheet
.
Statements on Auditing Standards (SAS)
Statements issued by the Accounting Standards Board of the American Institute of Certified Public Accountants (AICPA).
Statements on Standards for Accounting and Review Services (SSARS)
Statements issued by the American Institute of Certified Public Accountants (AICPA)
that specifically relate to reviews
and compilations.
(See Accountants' Report.)
Stock Compensation Plan
Fringe benefit
that gives employees the option to purchase the employer's stock at a specified price during a specified period.
Stock Option
Right to purchase or sell a specified number of shares of stock at specified prices and times.
Stock Split
Increase in the number of shares of a company's common stock
outstanding that result from the issuance of additional shares proportionally to existing stockholders without additional capital investment. The par value of each share is reduced proportionally.
Straight-Line Depreciation
Accounting
method that reflects an equal amount of wear and tear during each period of an asset's
useful life. For instance, the annual straignt-line depreciation of a $2,500 asset expected to last five years is $500. (See Accelerated Depreciation.)
Strike Price
Price of a financial instrument at which conversion or exercise occurs.
Subsequent Event
Material event that occurs after the end of the accounting period and before the publication of an entity's financial statements.
Such events are disclosed in the notes to the financial statements. (See Materiality.)
Swap
Financial contract in which two parties agree to exchange net streams of payments over a specified period. The payments are usually determined by applying different indices (e.g., interest rates, foreign exchange rates, equity indices) to a notional
amount. The term notional is used because swap contracts generally do not involve exchanges of principal.
* Definitions courtesy of the New York State Society of CPAs
