Wiley GAAP 2008

Definitions of Terms

A written agreement whereby a borrower agrees to pay a sum of money at a designated future date plus periodic interest payments at the stated rate.

For valuing assets, the price that a reporting entity that holds the asset would hypothetically receive by selling it on the measurement date. For valuing liabilities, the price that a hypothetical marketplace participant would pay to transfer the liability on the measurement date. Hypothetically, the amount that the holder of a reporting entity's debt would receive to transfer its interest in the reporting entity's liability to another market participant on the measurement date.

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Although GAAP literature has primarily focused on fair value in the context of assets and liabilities, the definition also applies to instruments classified in equity.

Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right (1) to receive cash or another financial instrument from a second entity or (2) to exchange other financial instruments on potentially favorable terms with the second entity.

A financial instrument has off‐balance‐sheet risk of accounting loss if the risk of accounting loss to the entity can exceed the amount recognized as an asset, if any, or if the ultimate obligation can exceed the amount that is recognized as ...