A full glossary of financial terms, sourced from the CFA Program curriculum.
A priori probability
A probability based on logical analysis rather than on observation or personal judgment.
The ability to terminate a project at some future time if the financial results are disappointing.
See residual income.
The amount of variability present without comparison to any reference point or benchmark.
The number of observations in a given interval (for grouped data).
Investments that have no direct benchmark portfolios.
Accelerated methods of depreciation
Depreciation methods that allocate a relatively large proportion of the cost of an asset to the early years of the asset’s useful life.
With the accounting systems, a formal record of increases and decreases in a specific asset, liability, component of owners’ equity, revenue, or expense.
Estimates of items such as the useful lives of assets, warranty costs, and the amount of uncollectible receivables.
Income as reported on the income statement, in accordance with prevailing accounting standards, before the provisions for income tax expense.
Synonyms: income before taxes pretax income