Finance Terms:Alphabet R

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[ R ]


Realisable value

o The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal.


Recognition

o The process of incorporating in the balance sheet or income statement an item that meets the definition of an element and satisfies the following criteria for recognition:
a. it is probable that any future economic benefit associated with the item will flow to or from the entity; and
b. the item has a cost or value that can be measured with reliability.

Relevance

o Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their past evaluations.


Reliability

o Information has the quality of reliability when it is free from material error and bias and can be depended upon by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent.


Revenue

o The gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.


Reserves

o these represent the build-up of undistributed profits and consist either of revenue or of capital reserves


Retained profits

o see ploughed-back profits



Revenue reserves

o these trading profits are distributable as dividend to the shareholders in a restricted manner, ie basically by the issue of fully-paid bonus shares.


Rights issue

o an issue of shares for cash to existing holders of share capital in the company. Normally the issue is at a price lower than the current market price acting as an inducement to existing holders to take up the shares.