Amortise/amortisation meaning

This glossary sets out many of the expressions commonly used in the leveraged finance market. Words appearing in the definitions in bold are defined elsewhere in this glossary. For further banking terminology, please refer to the main Banking & Finance Glossary... Acquisition finance glossary—A Acceleration Acceleration is the formal action taken by the agent, on the instructions of the majority lenders, following an event of default, such as making a demand for early repayment of the loan. See Practice Note: Accelerating a loan for more information... Accordion feature/accordion facility An accordion, also called an incremental debt feature, is a mechanism in the facilities agreement that, provided specified conditions are satisfied (for example, pro forma compliance with a leverage test), permits those lenders under the facilities agreement who wish to do so to advance additional debt. The terms for that extra debt are typically captured in an increase notice. This accordion or incremental debt flexibility is different from structural adjustment, which usually requires the majority consent...

Banking & Finance glossary A Auditing and Accounting Organisation for Islamic Financial Institutions (AAOIFI) The foremost Islamic, international, autonomous, independent, not-for-profit corporate body that develops and issues accounting, auditing, governance, ethics and Shari’ah benchmarks and standards for Islamic Financial Institutions (IFIs) and the wider Islamic finance sector. Founded in Bahrain in 1991, it is backed by a number of institutional members across more than 45 countries, including central banks and regulatory authorities, financial institutions, accounting and auditing practices, and legal firms. Its pronouncements are currently applied by leading Islamic financial institutions across the world and have advanced a progressive and gradual harmonisation of global Islamic finance practice. It also delivers professional qualification programmes—notably Certified Islamic Professional Accountant (CIPA), Certified Shari’ah Adviser and Auditor (CSAA), and the corporate compliance programme—in efforts to strengthen the industry’s human capital and governance frameworks. For further details, see Practice Note: Key participants in the Islamic finance industry—Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Acceleration Acceleration is the formal action...

Under the corporate intangible assets rules in Part 8 of the Corporation Tax Act 2009 (CTA 2009), the default position is that profits and losses relating to a company’s intangible fixed assets (IFAs) are calculated and recognised as credits and debits for corporation tax purposes, in step with the accounting treatment applied to those IFAs. In other words, a company’s accounts, drawn up in line with generally accepted accounting practice (GAAP), provide the platform from which the taxable and relievable items and the relevant amounts relating to the company’s IFAs are determined. This principle is often termed ‘tax following the accounts’. The effect of the tax-follows-the-accounts approach is that, where an accounting loss is recognised in arriving at a company’s profit and loss in respect of capitalised expenditure incurred to create or acquire an IFA, whether through amortisation charges or following an impairment review, a debit will generally be brought into account for tax purposes. This ensures tax relief is available for the depreciation of an IFA over its useful...