Escrow Financial Glossary

What is it? A transaction in which a third party, acting as the agent for the buyer and seller, carries out instructions of both and assumes the responsibilities of handling all the paperwork and disbursement of funds.

Finance Term Definition Added By: Adam

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Other Similar Finance Terms:

Financial Term APR is Annual Percentage Rate. The effective rate taking into account compounding and other fees. The nominal rate of interest for a specified period (usually one year).

Financial Term Capital Lease is A lease that meets at least one of the criteria outlined in paragraph 7 of FASB 13 and, therefore, must be treated essentially as a loan for book accounting purposes. The four criteria aretitle passes automatically by the end of the lease term lease contains a bargain purchase option (i.e., less than the fair market value) lease term is greater than 75% of estimated economic life of the equipment present value of lease payments is greater than 90% of the equipments fair market value A Capital Lease is treated by the lessee as both the borrowing of funds and the acquisition of an asset to be depreciated; thus the lease is recorded on the lessees balance sheet as an asset and corresponding liability (lease payable). Periodic lessee expenses consist of interest on the debt and depreciation of the asset.

Financial Term Interest is The cost of borrowing money. Also, the earnings on invested money.

Financial Term Earnings Per Share (EPS) is Companys earnings divided by the number of shares outstanding.

Financial Term Investment Grade Bond is A bond with one of the top four credit ratings (AAA, AA, A, BBB) of independent bond-rating agencies, like Moodys or Standard & Poors (see Bonds).