Finance Terms:Alphabet M

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[ M ]


Matching of costs with revenues

o A process in which expenses are recognised in the income statement on the basis of a direct association between the costs incurred and the earning of specific items of income. This process involves the simultaneous or combined recognition of revenues and expenses that result directly and jointly from the same transactions or other events. However, the application of the matching concept does not allow the recognition of items in the balance sheet which do not meet the definition of assets or liabilities.


Materiality

o Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.

Marginal cost

o the cost of producing one extra unit = variable cost


Marginal revenue

o the revenue from one extra sale


Margin of safety

o the excess of sales over the break-even volume.


Market value of a share

o the market value has no meaning in Balance Sheet terms, merely representing the price which a share will realize if sold at any particular point in time


Memorandum of Association

o the constitution of the company, enabling outsiders to assess its structure and powers


Minority interest

o these represent the capital and built-up reserves of a group fo companies owed by shareholders outside the group.