Understand the terms we use

Business Bookkeeping Terms

Acquisition Costs

The fixed and variable costs of acquiring new business, including commissions and similar distribution costs, and costs of accepting, issuing and initially recording policies.

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Claim Incurred

Claims that have occurred prior to the end of the reporting period, whether reported or unreported at the end of the reporting period.

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Contingent Rent

That portion of the lease payments that is not fixed in amount but is based on the future amount of a factor that changes other than with the passage of time (eg percentage of future sales, amount of future use, future price indices, future market rates o

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Costs of Disposal

Incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.

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Costs to Sell

The incremental costs directly attributable to the disposal of an asset (or disposal group), excluding finance costs and income tax expense.

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Guaranteed Element

An obligation to pay guaranteed benefits, included in a contract that contains a discretionary participation feature.

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Liability Adequacy Test

An assessment of whether the carrying amount of an insurance liability needs to be increased (or the carrying amount of related deferred acquisition costs or related intangible assets decreased), based on a review of future cash flows.

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