Gross and net profit meaning

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z This glossary provides helpful (re)insurance and underwriting definitions. For focused guidance on reinsurance terminology, see Practice Note: Reinsurance—essentials. A Accident An unforeseen or unintended event or incident that typically results in damage or injury (physical or financial) to the insured or a third party. Accidental damage Unintended or unexpected harm or damage caused to property or a person. Accidental death benefit Some life insurance policies pay an extra amount, over and above the original sum insured, if the insured dies because of an accident. Act of God (force majeure) An occurrence beyond anyone’s control, such as a natural disaster. Active underwriter The person with primary responsibility and authority to accept insurance and reinsurance risks on behalf of the members of a syndicate in the Lloyd’s market. See also Underwriter. Actuary A qualified professional who...

ARCHIVED This Practice Note is archived and no longer maintained. UK insurers must submit annual accounts pursuant to the Companies Act 2006. An insurer’s accounts are also governed by additional reporting frameworks, including UK Financial Reporting Standards issued by the Financial Reporting Council, or International Financial Reporting Standards from the International Accounting Standards Board (mandated in the EU by the International Accounting Standards Regulation and optional for UK insurers). While insurers share the usual corporate duties to disclose general accounting measures such as operating ratio and gross profit, they must also make specific premium-related declarations in their financial accounts and to their regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). This Practice Note serves as an introduction to key terminology used in relation to insurers’ accounts and how these terms apply in practice. For a general glossary, see: Glossary of insurance and reinsurance terms. Insurance premium and loss reserves An insurance premium is the amount paid for insurance or reinsurance cover and represents...

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...

Current ratio Date of calculations: [ insert date of calculations ] Formula: Current assets ÷ Current liabilities Calculation: Result: Result from previous month/year: % movement: If the ratio slips under 1.0, the firm lacks sufficient current assets to meet its current liabilities as they become due. Compare this outcome to the previous current ratio result. If the current ratio is declining and nearing 1.0, calculate the other ratios to gain a clearer view of why the firm is running out of money...

Data Source of data Figure £ Current assets — As per the balance sheet — [ insert figure ] Current liabilities — As per the balance sheet — [ insert figure ] Work in progress (WIP) — Shown under Current assets on the balance sheet — [ insert figure ] Debtors — Listed within Current assets on the balance sheet — [ insert figure ] Creditors — Included within Current liabilities on the balance sheet — [ insert figure ] Turnover — Refer to the P&L statement — [ insert figure ] Operating costs (including fee earner/director salaries) — P&L statement — [ insert figure ] Costs of fee earner salaries — P&L statement — [ insert figure ] Gross profit — P&L statement — [ insert figure ] Net profit — P&L statement — [ insert figure ]...