Financial Terminology

Capitalize: An accounting method to delay the recognition of expenses by showing them as long term assets. If a company buys an asset with long lifespan, it can extend its cost over a long time in order to avoid showing negative revenue.

http://www.investopedia.com/terms/c/capitalize.asp

http://www.accountingcoach.com/blog/capitalize

Capitalization: Adding the cost of acquiring the asset to the cost of the asset.

http://www.sharetipsinfo.com/capitalize-capitalization.html

Acid Test Ratio:

Purchase Accounting: http://accounting-financial-tax.com/2008/12/purchasing-objectives-its-impact-on-profitability/

Financial Terms

Forward Bidding- When we invite bid from others for auction. The settled amount will reach maximum value here.

Reverse Bidding- when we set the upper cap on price and the participants bid for lower prices. The settled amount can reach a minimum here.

Private Placement- When a company issues shares/securities to a select grp of investors (<49). Two types- preferential issue, QIP. In this, less regulatory clearances are required.

Preferential Allotment of shares/ Preferential Issues- Process by which allotment of securities/share is done to a select group of investors. This is done because raising capital from public issue often takes time and is expensive. http://articles.economictimes.indiatimes.com/2009-09-20/news/28485898_1_placement-preferential-allotment-public-offer

QIP (Qualified Institutional Placement)- When the company issues to select group of institutional investors called QIBs.

QIB- A Qualified Institutional Buyer (QIB) is one that owns and invests, on a discretionary basis, at least $100 million in securities; for a broker-dealer the threshold is $10 million. QIBs encompass a wide range of entities, including banks, savings and loans associations, insurance companies, investment companies, employee benefit plans or entities owned entirely by accredited investors. Banks and S&L associations must also have a net worth...