Glossary
E
68 terms
earnings or losses of an investee
Net income (or net loss) of an investee determined in accordance with U.S. generally accepted accounting principles (GAAP).
Used in 1 subtopic:323-10
earnings protection benefit
A feature of an annuity under which, in the event of death, the beneficiary will receive a benefit in addition to the account balance equal to a percentage (for example, 40 percent) of the difference between the account balance and the deposits less withdrawals.
Used in 1 subtopic:944-20
Economic Interest
A not-for-profit entity's (NFP's) interest in another entity that exists if any of the following criteria are met: The other entity holds or utilizes significant resources that must be used for the purposes of the NFP, either directly or indirectly by producing income or providing services. The NFP is responsible for the liabilities of the other entity. See paragraph 958-810-55-6 for examples of economic interests.
economic interest in the entity
Any type or form of pecuniary interest or arrangement that an entity could issue or be a party to, including equity securities; financial instruments with characteristics of equity, liabilities, or both; long-term debt and other debt-financing arrangements; leases; and contractual arrangements such as management contracts, service contracts, or intellectual property licenses.
Used in 1 subtopic:718-10
Economic Life
Either the period over which an asset is expected to be economically usable by one or more users or the number of production or similar units expected to be obtained from an asset by one or more users.
Used in 1 subtopic:842-10
Effective Date of the Modification
The date that a lease modification is approved by both the lessee and the lessor.
Used in 1 subtopic:842-10
Effective Interest Rate
The rate of return implicit in the financial asset, that is, the contractual interest rate adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition of the financial asset. For purchased financial assets with credit deterioration, however, to decouple interest income from credit loss recognition, the premium or discount at acquisition excludes the discount embedded in the purchase price that is attributable to the acquirer's assessment of credit losses at the date of acquisition.
Used in 8 subtopics:230-10310-10310-20310-30310-40326-10+2 more
effective notional amount
The effective notional amount is the stated notional amount adjusted for any leverage factor.
electronic tickets
An electronic (or e-ticket) reflects the passenger's itinerary in electronic form. Like paper tickets, e-tickets contain information for each flight segment of a passenger's itinerary. However, while a paper ticket consists of multiple coupons that are used to record a sale and to document the service rendered, e-tickets exist only as a digital record in the airline computer system and contain no paper coupons. Instead, the airline's host reservation system or global distribution system (GDS) produces an e-ticket sales record for each sale transaction, which is used to record a sale of e-ticket. Boarding documents are issued for e-tickets at check-in, and the carrier documents transportation service at the boarding point by either collecting boarding documents or scanning them as evidence of the service rendered.
Used in 1 subtopic:908-10
embedded call option
A call option held by the issuer of a financial instrument that is part of and trades with the underlying instrument. For example, a bond may allow the issuer to call it by posting a public notice well before its stated maturity that asks the current holder to submit it for early redemption and provides that interest ceases to accrue on the bond after the early redemption date. Rather than being an obligation of the initial purchaser of the bond, an embedded call option trades with and diminishes the value of the underlying bond.
Used in 1 subtopic:860-10
Embedded Credit Derivative
An embedded derivative that is also a credit derivative.
embedded derivative
Implicit or explicit terms that affect some or all of the cash flows or the value of other exchanges required by a contract in a manner similar to a derivative instrument.
emerging entity
An entity (sometimes referred to as the reorganized entity), that has had its plan confirmed and begins to operate as a new entity.
Used in 1 subtopic:852-10
employee
A person who has rendered or is presently rendering service.
Used in 9 subtopics:205-960220-40718-10718-20718-30718-40+3 more
Employee Compensation
(P) December 16, 2026; (N) December 16, 2026220-40-65-1All forms of cash consideration (including deferred cash compensation), share-based payment arrangements, medical care benefits, pension benefits, postretirement benefits, and nonretirement postemployment benefits (including special or contractual termination benefits) given by an entity in exchange for service rendered by employees or for the termination of employment. This includes compensation cost arising from wages, salaries, profit-sharing, bonuses, one-time employee termination benefits, other postemployment benefits, employee stock ownership plans, employee share purchase plans, defined contribution plans, multiemployer plans, and any other compensation cost recognized in accordance with the guidance in Topic 710 on compensation, Topic 712 on nonretirement postemployment benefits, Topic 715 on retirement benefits, and Topic 718 on stock compensation. This also includes compulsory payments paid to the general government that confer entitlement to receive a (contingent) future social benefit, such as unemployment insurance benefits and supplements; accident, injury, and sickness benefits; old-age, disability, and survivors’ pensions; and family allowances, reimbursements for medical and hospital expenses, or provision of hospital or medical services. For defined benefit plans within the scope of Topic 715, employee compensation includes only the service cost component of net periodic pension cost and the service cost component of net periodic postretirement benefit cost.
Used in 1 subtopic:220-40
Employee Stock Ownership Plan
An employee stock ownership plan is an employee benefit plan that is described by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 as a stock bonus plan, or combination stock bonus and money purchase pension plan, designed to invest primarily in employer stock. Also called an employee share ownership plan.
employer loan
An employer loan is a loan made by the employer to the employee stock ownership plan, with no related outside loan.
Used in 1 subtopic:718-40
endeavor
The activity that participants in a collaborative arrangement collaborate on. For example, in a biotechnology or pharmaceutical environment the endeavor may be the development and commercialization of a drug candidate. In the entertainment industry, it may be production and distribution of a motion picture.
Used in 1 subtopic:808-10
endorsement split-dollar life insurance
A split-dollar life insurance arrangement in which the entity owns and controls the insurance policy. The employer enters into a separate agreement that splits the policy benefits between the employer and the employee. The employer owns the policy, controls all rights of ownership, and may terminate the insurance policy (and, in turn, the policy benefits promised to the employee). To effect the split-dollar arrangement, the employer endorses a portion of the death benefits to the employee (the employee designates a beneficiary for this portion of the death benefits). Upon the death of the employee, the employee's beneficiary typically receives the designated portion of the death benefits directly from the insurance entity and the employer receives the remainder of the death benefits.
Used in 1 subtopic:715-60
Endowment contracts
An insurance contract that provides insurance from inception of the contract to the maturity date (endowment period). The contract specifies that a stated amount, adjusted for items such as policy loans and dividends, if any, will be paid to the beneficiary if the insured dies before the maturity date. If the insured is still living at the maturity date, the policyholder will receive the maturity amount under the contract after adjustments, if any. Endowment contracts generally mature at a specified age of the insured or at the end of a specified period.
Used in 1 subtopic:944-20
Endowment Fund
An established fund of cash, securities, or other assets to provide income for the maintenance of a not-for-profit entity (NFP). The use of the assets of the fund may be with or without donor-imposed restrictions. Endowment funds generally are established by donor-restricted gifts and bequests to provide a source of income in perpetuity or for a specified period. See Donor-Restricted Endowment Fund. Alternatively, an NFP's governing board may earmark a portion of its net assets as a Board-Designated Endowment Fund. See Funds Functioning as Endowment.
Used in 7 subtopics:205-958210-958220-958230-10320-958605-958+1 more
enhanced 12b-1 plan
A reimbursement 12b-1 plan that provides that, on termination of the plan, the fund is required to continue paying the 12b-1 fee to the extent the distributor has excess costs.
Used in 1 subtopic:946-20
Enhanced-Crediting-Rate Bonus
A sales inducement in which the insurance entity offers customers a crediting rate for a stated period in excess of that currently being offered for other similar contracts.
entry price
The price paid to acquire an asset or received to assume a liability in an exchange transaction.
Used in 1 subtopic:820-10
Environmental Credit
(P) December 16, 2027; (N) December 16, 2028818-10-65-1An enforceable right that is acquired, internally generated, granted by a regulatory agency or its designee(s), or received in a nonreciprocal transfer that is not a grant from a regulator or its designee(s) that meets all of the following criteria:Lacks physical substance and is not a financial asset.Is represented to prevent, control, reduce, or remove emissions or other pollution.Is, or previously was, separately transferable in an exchange transaction. If an item is no longer separately transferable in an exchange transaction, an entity must be able to use that item to satisfy an environmental credit obligation to meet this criterion.Is not an income tax credit that may be used to settle an entity’s income tax liability, regardless of whether the entity has a tax liability or intends to use the credit for that purpose.An environmental credit that meets the above criteria may exist in a variety of forms, including (but not limited to) credits, certificates, allowances, and offsets.
Used in 11 subtopics:220-40350-10405-20605-958805-20815-10+5 more
Environmental Credit Obligation
(P) December 16, 2027; (N) December 16, 2028818-10-65-1A regulatory compliance obligation arising from existing or enacted laws, statutes, or ordinances represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. Obligations within the scope of Subtopic 410-30 are not environmental credit obligations.
Used in 11 subtopics:220-40350-10405-20605-958805-20815-10+5 more
equitable right of redemption
The right of a property owner who has defaulted on a secured obligation to recover the securing property before its sale by paying the amounts due and any appropriate fees and charges. Other creditors of or a receiver for the property owner also may be able to exercise that right. After a transfer of a financial asset, a right of redemption may allow the transferor to buy back the transferred asset.
Used in 1 subtopic:860-10
Equity Interests
Used broadly to mean ownership interests of investor-owned entities; owner, member, or participant interests of mutual entities; and owner or member interests in the net assets of not-for-profit entities.
Equity Restructuring
A nonreciprocal transaction between an entity and its shareholders that causes the per-share fair value of the shares underlying an option or similar award to change, such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend.
Equity Security
Any security representing an ownership interest in an entity (for example, common, preferred, or other capital stock) or the right to acquire (for example, warrants, rights, forward purchase contracts, and call options) or dispose of (for example, put options and forward sale contracts) an ownership interest in an entity at fixed or determinable prices. The term equity security does not include any of the following: Written equity options (because they represent obligations of the writer, not investments) Cash-settled options on equity securities or options on equity-based indexes (because those instruments do not represent ownership interests in an entity) Convertible debt or preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor.
Equity Transfer
An equity transfer is nonreciprocal. An equity transfer is a transaction directly between a transferor and a transferee. Equity transfers are similar to ownership transactions between a for-profit parent and its owned subsidiary (for example, additional paid-in capital or dividends). However, equity transfers can occur only between related not-for-profit entities (NFPs) if one controls the other or both are under common control. An equity transfer embodies no expectation of repayment, nor does the transferor receive anything of immediate economic value (such as a financial interest or ownership).
Equity-indexed annuity
A deferred fixed annuity contract with a guaranteed minimum interest rate plus a contingent return based on some internal or external equity index, such as the Standard and Poor's S&P 500 Index.
Used in 1 subtopic:815-15
error in previously issued financial statements
An error in recognition, measurement, presentation, or disclosure in financial statements resulting from mathematical mistakes, mistakes in the application of generally accepted accounting principles (GAAP), or oversight or misuse of facts that existed at the time the financial statements were prepared. A change from an accounting principle that is not generally accepted to one that is generally accepted is a correction of an error.
Used in 1 subtopic:250-10
estimated current value
For an asset, the amount at which the item could be exchanged between a buyer and seller, each of whom is well informed and willing, and neither of whom is compelled to buy or sell.
Used in 1 subtopic:274-10
Estimated Residual Value
The estimated fair value of the leased property at the end of the lease term.
Used in 1 subtopic:842-50
event
A happening of consequence to an entity. The term encompasses both transactions and other events affecting an entity.
excess costs
The cumulative distribution costs incurred by the distributor less the sum of cumulative 12b-1 fees paid, cumulative contingent-deferred sales load payments, and future cumulative contingent-deferred sales load payments by current shareholders, if reasonably estimable.
Used in 1 subtopic:946-20
Exchange
An exchange (or exchange transaction) is a reciprocal transfer between two entities that results in one of the entities acquiring assets or services or satisfying liabilities by surrendering other assets or services or incurring other obligations.
Used in 13 subtopics:220-40350-10405-20605-958805-20805-958+6 more
Exchange Market
A market in which closing prices are both readily available and generally representative of fair value. An example of such a market is the New York Stock Exchange.
Used in 1 subtopic:820-10
exchange rate
The ratio between a unit of one currency and the amount of another currency for which that unit can be exchanged at a particular time.
executive officers
See paragraph 942-210-S99-1, Regulation S-X Rule 9-03(7)(e)(4), for the definition of executive officers for the purpose of Regulation S-X Rule 9-03.
Used in 1 subtopic:210-942
exempt and nonexempt cooperatives
Cooperatives classified according to their federal income tax status. Both types are permitted to deduct from taxable income patronage distributed or allocated on a qualified basis to patrons to the extent that the distributions represent earnings of the cooperative derived from business done with or for the patrons. In addition, cooperatives meeting the requirements of Internal Revenue Code section 521 (exempt cooperatives) are permitted to deduct limited amounts paid as dividends on capital stock and distributions to patrons of income from business done with the U.S. government or its agencies and income from nonpatronage sources.
Used in 1 subtopic:905-10
exercise contingency
A provision that entitles the entity (or the counterparty) to exercise an equity-linked financial instrument (or embedded feature) based on changes in an underlying, including the occurrence (or nonoccurrence) of a specified event. Provisions that accelerate the timing of the entity's (or the counterparty's) ability to exercise an instrument and provisions that extend the length of time that an instrument is exercisable are examples of exercise contingencies.
Used in 1 subtopic:815-40
exercise price
The amount that must be paid for a share of common stock upon exercise of an option or warrant.
Used in 1 subtopic:260-10
existing contract
A contract that is currently held by the contract holder and excludes nonintegrated contract features.
exit price
The price that would be received to sell an asset or paid to transfer a liability.
Used in 1 subtopic:820-10
Expected Cash Flow
The probability-weighted average (that is, mean of the distribution) of possible future cash flows.
Expected Long-Term Rate of Return on Plan Assets
An assumption about the rate of return on plan assets reflecting the average rate of earnings expected on existing plan assets and expected contributions to the plan during the period.
expected losses
A legal entity that has no history of net losses and expects to continue to be profitable in the foreseeable future can be a variable interest entity (VIE). A legal entity that expects to be profitable will have expected losses. A VIE's expected losses are the expected negative variability in the fair value of its net assets exclusive of variable interests and not the anticipated amount or variability of the net income or loss.
Used in 1 subtopic:810-10
Expected Losses and Expected Residual Returns
Expected losses and expected residual returns refer to amounts derived from expected cash flows as described in FASB Concepts Statement No. 7, Using Cash Flow Information and Present Value in Accounting Measurements. However, expected losses and expected residual returns refer to amounts discounted and otherwise adjusted for market factors and assumptions rather than to undiscounted cash flow estimates. The definitions of expected losses and expected residual returns specify which amounts are to be considered in determining expected losses and expected residual returns of a variable interest entity (VIE). (P) December 16, 2024; (N) December 16, 2025 105-10-65-9 Expected losses and expected residual returns refer to amounts derived from expected cash flows. However, expected losses and expected residual returns refer to amounts discounted and otherwise adjusted for market factors and assumptions rather than to undiscounted cash flow estimates. The definitions of expected losses and expected residual returns specify which amounts are to be considered in determining expected losses and expected residual returns of a variable interest entity (VIE). A computation of expected losses, expected residual returns, and expected variability is illustrated in paragraphs 810-10-55-42810-10-55-43810-10-55-44810-10-55-45810-10-55-46810-10-55-47810-10-55-48810-10-55-49.
Used in 1 subtopic:810-10
expected postretirement benefit obligation
The actuarial present value as of a particular date of the postretirement benefits expected to be paid by the employer's plan to or for each employee, the employee's beneficiaries, and any covered dependents pursuant to the terms of the plan.
Used in 1 subtopic:715-60
expected residual profit
The amount of profit, whether called interest or another name, such as equity kicker, above a reasonable amount of interest and fees expected to be earned by a lender.
expected residual returns
A variable interest entity's (VIE's) expected residual returns are the expected positive variability in the fair value of its net assets exclusive of variable interests.
Used in 1 subtopic:810-10
Expected Return on Plan Assets
An amount calculated as a basis for determining the extent of delayed recognition of the effects of changes in the fair value of plan assets. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets.
expected variability
Expected variability is the sum of the absolute values of the expected residual return and the expected loss. Expected variability in the fair value of net assets includes expected variability resulting from the operating results of the legal entity.
Used in 1 subtopic:810-10
Expendable parts
Parts that are ordinarily used up (consumed) and replaced with new parts, as opposed to those parts that are capable of being used over and over after being refurbished (rotable flight equipment).
Used in 1 subtopic:330-908
expenditures
Expenditures to which capitalization rates are to be applied are capitalized expenditures (net of progress payment collections) for the qualifying asset that have required the payment of cash, the transfer of other assets, or the incurring of a liability on which interest is recognized (in contrast to liabilities, such as trade payables, accruals, and retainages on which interest is not recognized).
Used in 1 subtopic:835-20
experience adjustments
A provision in an insurance or reinsurance contract that modifies the premium, coverage, commission, or a combination of the three, in whole or in part, based on experience under the contract.
Used in 1 subtopic:340-30
explicit
A service period that is explicitly stated in the terms of a share-based payment award. For example, an award stating that it vests after three years of continuous employee service from a given date (usually the grant date) has an explicit service period of three years. See Derived Service Period, Implicit Service Period, and Requisite Service Period.
explicit approach to assumptions
An approach under which each significant assumption used reflects the best estimate of the plan's future experience solely with respect to that assumption. See Implicit Approach to Assumptions.
exploitation costs
All direct costs (including marketing, advertising, publicity, promotion, and other distribution expenses) incurred in connection with the distribution of a film.
exploration
Exploration involves both of the following: Identifying areas that may warrant examination Examining specific areas that are considered to have prospects of containing oil and gas reserves, including drilling exploratory wells and exploratory-type stratigraphic test wells.
Used in 7 subtopics:235-932360-932470-932720-932810-932835-932+1 more
exploration costs
See paragraph 932-10-S99-1, Regulation S-X Rule 4-10(a)(12), for the definition of exploration costs as used within that Rule.
Exploratory Well
An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, a service well , or a stratigraphic test well.
extended warranty
An agreement to provide warranty protection in addition to the scope of coverage of the manufacturer's original warranty, if any, or to extend the period of coverage provided by the manufacturer's original warranty.
Used in 1 subtopic:605-20