Wiley GAAP 2008

Definitions of Terms

Analogous entity	An enterprise, such as certain limited liability companies, that has governance provisions that are functionally equivalent to those of a corporation.
Available‐for‐sale securities	Investments (debt or equity) that are classifiable neither as held‐to‐maturity nor as trading.
Corporate joint venture	A corporation formed, owned, and operated by two or more businesses (venturers) as a separate and discrete business or project (venture) for their mutual benefit.
Cost method	A method of accounting for an investment whereby the investor recognizes only dividends received from investee as income.
Differential	The difference between the carrying value of common stock investment and book value of underlying net assets of the investee; it is to be allocated between excess (deficiency) of fair value over (under) book value of net assets, with any remainder accounted for as goodwill (or negative goodwill), and tested periodically for impairment (if positive goodwill) or allocated against the underlying investee assets and, if necessary, recognized as an extraordinary income item (if negative goodwill).
Equity method	A method that includes recognition of a percentage share of income or loss, dividends, and any changes in the investment percentage in an investee by an investor. This method recognizes the effects of any intercompany transactions between the investor and investee.
Goodwill	The excess of the cost of the acquired interest in an investee over the sum of the ...