instruction
stringlengths 5
1.05k
| output
stringlengths 6
22.3k
| input
stringclasses 1
value |
|---|---|---|
what is the world bank | the world bank is an international organization dedicated to providing financing advice and research to developing nations to aid their economic advancement the bank predominantly acts as an organization that attempts to fight poverty by offering developmental assistance to middle and low income countries understanding the world bankthe world bank is a provider of financial and technical assistance to individual countries around the globe the bank considers itself a unique financial institution that sets up partnerships to reduce poverty and support economic development the world bank supplies qualifying governments with low interest loans zero interest credits and grants all to support the development of individual economies debt borrowings and cash infusions help with global education healthcare public administration infrastructure and private sector development the world bank also shares information with various entities through policy advice research and analysis and technical assistance it offers advice and training for both the public and private sectors examples of what the world bank doesthe world bank provides financing advice and other resources to developing countries in the areas of education public safety health and other areas of need often nations organizations and other institutions partner with the world bank to sponsor development projects in 2017 the world bank created the human capital project which seeks to help countries invest in and develop their people to be productive citizens and active contributors to their economy world leaders are urged to prioritize investments in education healthcare and social protections and in return they will realize a stronger economy full of healthy thriving adults the human capital project outlines how governments should invest in providing quality affordable childcare to support and improve child development increase women s access to better employment opportunities and increase economic growth to name a few to build human capital globally the world bank has identified several areas of focus the human capital index hci measurement and research and country engagement created in october 2018 the human capital index summarizes a nation s investments in its human capital specifically concerning health and education the index is used to identify what is lost from the lack of investments in human capital it also prompts leaders to think of how to remedy these deficiencies beyond analyzing human capital the world bank measures the effectiveness of a nation s educational and healthcare systems doing so helps them identify what should be continued and what should be changed it can also give insight on where to allocate resources country engagement requires a country to take a whole government approach to addressing factors that compromise human capital the nation its leaders and influencers band together to champion reducing poverty and increasing shared prosperity in april 2016 the world bank approved the national immunization support project for pakistan this project costing an estimated 377 41 million aims to increase the equitable distribution of vaccines to children ages 0 to 23 months the project consists of five components that are designed to enhance the country s vaccine distribution to the most vulnerable the first component creates a governance structure and addresses logistics monitoring and evaluation systems the second component involves performance planning and the alignment of skilled human resources the third component increases the awareness of and promotes the program among pakistan s citizens as well as addresses how their schools curriculum aligns with this initiative the fourth component makes it possible to obtain the necessary equipment to widely distribute vaccines and increase the supply chain for vaccines lastly the fifth component includes being able to expand the program s reach and enhance research and development in this field the learning for the future project was created to enhance children s readiness for school and the effectiveness of secondary instruction in specific kyrgyz republic communities the project consists of two components increasing the equitable access of early childhood education and improving the effectiveness of instruction in secondary education to meet these objectives the program establishes 500 community based kindergarten programs which will allow for the enrollment of 20 000 children to increase the effectiveness of instruction the project finances a training program for 500 new teachers and provides digital resources to complement existing learning resources e g textbooks the project also assesses how well students learn cognitively and non cognitively world bank financialsthe world bank is an organization rather than a bank therefore its financials are not comparable to traditional financial institutions within the organization operates different sectors the international bank of reconstruction and development ibrd the international development association ida the international finance corporation ifc and the multilateral investment guarantee agency miga as of 2022 the world bank has loaned the most money 38 26 billion to india the ibrd the original world bank loans money to creditworthy low income or middle income countries for the fiscal year ended june 30 2023 the ibrd recorded net interest revenues of 3 21 billion and allocable income of 1 31 billion its equity to loans ratio was 22 0 the ida issues credits or interest free loans to the poorest nations for the fiscal year ended june 30 2023 the world bank recorded an adjusted net income of 193 million and a deployable strategic capital dsc ratio of 24 1 which is the available capital divided by the capital needed to support the portfolio ifc provides funds and guidance to the private sector for the purpose of helping developing nations stay on a growth trajectory for the fiscal year ended june 30 2023 the world bank recorded net income gain of 672 million and a total comprehensive income gain of 1 386 million its capital utilization ratio cur ratio was 61 lastly miga insures investments to the poorest countries to help reduce poverty and improve the welfare of a nation s citizens for the fiscal year ended june 30 2023 miga recorded net interest revenues of 139 million for the fiscal year 2023 the world bank has distributed 38 57 billion in ibrd loans 26 6 billion in interest free loans or credits and 7 28 billion in grants history of the world bankthe world bank was created in 1944 out of the bretton woods agreement which was secured under the auspices of the united nations in the latter days of world war ii the bretton woods agreement included several components a collective international monetary system the formation of the world bank and the creation of the international monetary fund imf since their founding both the world bank and the international monetary fund have worked toward many of the same goals the original goals of both the world bank and imf were to support european and asian countries needing financing to fund post war reconstruction efforts both the world bank and imf outlasted the collective international monetary system which was central to the bretton woods agreement president nixon halted the bretton woods international monetary system in the 1970s however the world bank and imf remained open and continued to thrive on providing worldwide aid the world bank and imf are headquartered in washington d c the world bank has staff in more than 170 offices worldwide though titled as a bank the world bank is not necessarily a bank in the traditional chartered meanings of the word the world bank and its subsidiary groups operate within their own provisions and develop their own proprietary financial assistance products all with the same goal of serving countries capital needs internationally the world bank s counterpart the imf is structured more like a credit fund the differing in the structuring of the two entities and their product offerings allows them to provide different types of financial lending and financing support each entity also has several of its own distinct responsibilities for serving the global economy world bank structurethrough the years the world bank has expanded from a single institution to a group of five unique and cooperative institutional organizations known as the world banks or collectively as the world bank group the first organization is the international bank for reconstruction and development ibrd an institution that provides debt financing to governments that are considered middle income the second organization within the world bank group is the international development association ida a group that gives interest free loans to the governments of poor countries the international finance corporation ifc the third organization focuses on the private sector and provides developing countries with investment financing and financial advisory services the fourth part of the world bank group is the multilateral investment guarantee agency miga an organization that promotes foreign direct investments in developing countries the fifth organization is the international centre for settlement of investment disputes icsid an entity that provides arbitration on international investment disputes | |
what is the purpose of the world bank | the world bank is an organization that provides funds advice and research to developing nations to help advance their economy and combat poverty who owns the world bank no person organization government or nation owns the world bank it is an organization made up of member countries represented by a board of governors this board governs the organization creates policies and appoints executive directors the executive directors govern the bank s business and budget and grant loan approvals the president and managers manage the day to day operations | |
where does the world bank get its money | the world bank receives funding from wealthy nations and from the issuance of debt securities such as bonds | |
which country is the world bank in | the world bank is headquartered in washington d c however it has locations in more than 170 countries including benin argentina and china who is the ceo of the world bank the world bank is led by president ajay banga the organization s board of directors is comprised of four separate boards one for each division of the world bank each board oversees the operations of their respective sector for example the board for the international bank for reconstruction and development ibrd oversees the operations for that segment and the board for the international development agency ida oversees the operations for that segment the bottom linethe world bank is an international financial organization that provides funding to developing countries to support development financial assistance may come in the form of low interest loans zero interest credits or grants the organization also provides policy advice and technical assistance to countries | |
what is the world bank group | the world bank group is the world s most prominent development bank with a stated mandate and mission to reduce world poverty it has 189 member countries and is headquartered in washington d c the ceo of the world bank group as of june 2021 is david malpass 1understanding the world bank groupthe world bank group provides advice and financial assistance in the form of discounted loans and grants to countries struggling with poverty with a focus on areas such as wellness education and agriculture it was created on december 27 1945 as part of the bretton woods agreement and consists of five organizations the international bank for reconstruction and development ibrd the international development association ida the international finance corporation ifc the multilateral investment guarantee agency miga the international centre for settlement of investment disputes icsid 1the first two institutions the ibrd and the ida comprise the world bank a subgroup within the world bank group 1the world bank group has 189 member states with the u s as the bank s largest shareholder 23 the u s president nominates the bank s president all of whom have so far been u s citizens 4 the bank s headquarters is in washington d c 1according to the world bank group s website it has two goals it aims to accomplish by 2030 to end extreme poverty defined as reducing the share of the world population living on less than 1 90 per day to 3 and to increase the incomes of the lowest earning 40 of every country 5in 2021 the world bank group has committed over 125 billion in funds to over 100 countries to fight the health economic and social impacts of the pandemic the fastest and largest crisis response in our history 6 | |
what is the world economic forum wef | the world economic forum wef is an international organization headquartered in geneva switzerland that brings together individuals and political and business leaders each year to discuss significant issues that impact the global economy these include but are not limited to political economic social and environmental concerns the wef is best known for its annual world economic forum meeting at davos the swiss ski resort the event regularly draws business and political leaders from around the world for a series of discussions about global issues the covid 19 pandemic disrupted a half century routine for this event which was restored in 2022 understanding the world economic forum wef the world economic forum s wef membership is a cross section of the global elite from the private and public sectors and includes some of the most prominent ceos diplomats celebrities media personalities government officials religious leaders and union representatives from around the world founded in 1971 in geneva the wef has a mission based on what is known as stakeholder theory stakeholder theory proposes that while a private sector entity s aim is to increase profits for its shareholders it is incumbent upon the organization to view the rest of society as having a stake in the company s actions stakeholders such as employees customers the company serves and the local and global community must be considered when making critical decisions headquartered in switzerland the wef has offices in new york beijing tokyo san francisco and mumbai the wef is funded by its own membership which includes industry leaders and individuals from all walks of life in addition many celebrities journalists and interested individuals are willing to pay steep annual dues and meeting fees to attend regional meetings are held in developing nations in africa east asia and latin america but the annual meeting in davos switzerland is the central meeting event for all members wef meetings introduce new issues trends and organizations to members and the public for discussion and are commonly believed to influence corporate and public sector decision making the wef organization has several ongoing projects aimed at addressing specific global concerns including climate change the fourth industrial revolution and global security it works with its international partners to bring about positive change in these areas the wef also produces research into its members areas of interest and helps guide public private sector collaboration and communication among its members the world economic forum has no power to make decisions but it may have considerable ability to influence political and business policy decisions the purpose of its annual meeting is to bring the world s decision makers together regularly to discuss the pressing problems of the day and consider how best to address them world economic forum wef annual meetingthe wef annual meeting in davos switzerland usually attracts about 2 500 people from more than 100 nations the davos meeting is covered by media outlets globally past davos meetings have allowed government leaders to address issues of political conflict with one another raising the stature of the yearly meeting to that of a political and economic forum the 2019 world economic forum annual meeting featured teenage environmental activist greta thunberg who declared i don t want your hope i want you to panic and act the idea that the forum could assist with global conflict resolution in addition to promoting its own best practices in business management was an early vision of wef founder klaus schwab schwab a german engineer and economist now serves as the executive chair of the wef a january 2021 meeting occurred virtually not surprisingly much of the year s discussion centered on the pandemic focusing on the fragility of the global supply chain that the pandemic revealed the annual in person meeting planned for august 2021 in singapore under the theme of the great reset was canceled in may 2022 the conference once again was held in person in davos topics discussed by leaders at the 2022 forum were the war in ukraine impacts on the global economy from the war and the covid 19 pandemic and the future of globalization also in the discussions were climate change health technology entreprenuer and business roles and what work will look like in the future | |
what is the biggest risk facing the world according to the world economic forum | failure to act on cost of living crisis extreme weather geoeconomic confrontations climate change social cohesion erosion and large scale environmental damage are the top six short term risks identified by the world economic forum global risks report who are the members of wef the world economic forum does not publish a members list but does list meeting delegates for example there were about 2 000 delegates at the 2022 meeting in davos | |
what is the world economic forum agenda | the world economic forum has three focus areas that drive its agenda and activities mastering the fourth industrial revolution solving the problems of the global commons and addressing global security issues | |
what is the world economic outlook weo | the world economic outlook weo is a comprehensive report published twice a year by the international monetary fund imf it includes the imf s estimates and forecasts for global output growth and inflation as well as for real gross domestic product gdp growth consumer prices current account balances and unemployment in the fund s 190 member countries grouped by region and development status the weo also includes several chapters on selected pressing economic issues the data is drawn from imf representatives consultations with member countries and is included in the weo database the weo is usually published in april and october followed by the less comprehensive weo updates in july and january 1understanding the world economic outlookthe world economic outlook is the product of the imf s systemic survey of macroeconomic conditions and prospects in member countries as well as an analysis and forecast of global economic and financial developments 2because the imf is a leading global financial organization heavily involved in macroeconomic analysis as a result of its international lending programs its data are widely cited 3 for the same reason the weo s semiannual forecasts garner prominent headlines and close scrutiny from financial markets analysts 4while imf has drawn criticism over the consequences of its structural adjustment programs for the poor in the debtor countries among others the weo has been less controversial 5 it is prepared by the fund s professional staff and incorporates input from the organization s executive directors before publication 6example of world economic outlookthe world economic outlook published in april 2022 titled war sets back the global recovery lowered the imf s global growth forecasts for 2022 and 2023 from an estimated 6 1 gain in 2021 amid a rebound from the downturn caused by the covid 19 pandemic as a result of russia s invasion of ukraine and the related rise in energy and commodity prices the imf lowered its annual global growth forecast to 3 6 for 2022 as well as 2023 from 4 4 and 3 8 respectively in the weo update issued three months earlier 7the april 2022 world economic outlook included chapters on global prospects and policies private sector debt and the global recovery a greener labor market employment policies and economic transformation and global trade and value chains during the pandemic 8the first chapter included charts illustrating the surge in grain prices in q1 2022 and the exposure of european banks to russia as a percentage of total assets by country an extensive statistical appendix offered a discussion of the fiscal policy assumptions used in the weo s economic projections for selected countries as well as tables for past and projected output growth consumer prices fiscal and debt balances by country | |
what was the world equity benchmark series webs | the world equity benchmark series webs was an international fund traded on the american stock exchange it was introduced in 1996 by morgan stanley and was a type of hybrid security that possesses qualities of both open end and closed end funds in 2000 webs was renamed to ishares msci emerging markets exchange traded fund etf the ishares msci emerging markets etf seeks to track the investment results of the msci emerging markets index an index composed of large and mid capitalization emerging market equities 1 2 understanding the world equity benchmark series webs a closed end fund is a fund formed as a publicly traded investment these funds can raise a designated amount of capital with an initial public offering the money collected goes into a fund that is then listed as a stock and traded on a public exchange it is a specialized stock portfolio with a one time fixed number of shares an open end fund is a conventional mutual fund made up of a pool of money from many investors for investing in stocks and bonds investors share gains and losses in proportion to their investment in the fund an organization that used a webs owned each of the securities traded on the msci country indexes ownership was in an approximate ratio to the initial capitalization or investment a webs could be bought sold and traded like stocks investors could use the webs to achieve international diversification the world equity benchmark series was available for many different countries including australia austria belgium canada france germany hong kong italy japan malaysia mexico the netherlands singapore spain sweden switzerland and the united kingdom the name change of the world equity benchmark series webs to ishares msci emerging markets etf was intended to reflect the consistent brand name for all exchange traded funds managed by barclays global investors now blackrock at the time the indexes included ishares msci australia ishares msci austria ishares msci belgium ishares msci canada ishares msci france ishares msci germany ishares msci hong kong ishares msci italy ishares msci japan ishares msci malaysia ishares msci mexico ishares msci netherlands ishares msci singapore ishares msci south korea ishares msci spain ishares msci sweden ishares msci switzerland and ishares msci united kingdom 2ishares msci emerging markets etf and the spdr s p 500 trustthe ishares msci emerging markets etf is similar to the spdr s p 500 trust an exchange traded fund etf managed by state street global advisors that tracks the standard poor s 500 index s p 500 formerly the spdr s p 500 trust was simply called the standard poor s depository receipt more often it was shortened to spdr and referred to as a spider each share of an spdr s p 500 trust contains one tenth of the s p 500 index and trades at roughly one tenth the dollar value level of the s p 500 investors can use the spdr s p 500 trust to realize broad diversification to specific portions of the market for example the spdr s p dividend etf is an investment vehicle that seeks to provide investment results that track the total return performance of the s p high yield dividend aristocrats index this means that the spdr s p dividend etf indexes dividend paying stocks that are a part of the s p 500 the etf is made up of a total of 112 companies and tracks performance through its net asset value which is communicated as a price per share 3 | |
what is the world federation of stock exchanges wfe | the world federation of stock exchanges more commonly known as the world federation of exchanges is an international trade group that supports the interests of regulated securities exchanges around the world and promotes widespread access to financial markets and the safety and soundness of the global financial system understanding the world federation of stock exchanges wfe the world federation of exchanges wfe is located in london the united kingdom the wfe is an industry group and private company that was established in 1961 and today represents more than 250 different exchanges and clearinghouses 1the wfe s members are represented in the following regions of the world wfe exchanges are home to nearly 59 400 listed companies while the annual trading volume that passes through wfe members equals 162 04 trillion as of 2021 1member exchanges include the following goals of the world federation of exchangesthe world federation of exchanges aims to be the most important global advocacy group for companies around the world that facilitate the trading of financial assets because the financial services industry is heavily regulated and because those regulations can differ greatly from country to country the primary goal of the group is to advocate for smart regulation that is harmonized across borders 1the wfe also seeks to provide value to its members through the dissemination of vital information to the industry and by convening meetings where members of the industry can share information and network to this end the world federation of exchanges stages several events each year including the wfe general assembly and annual meeting which is held each year by one of its member organizations 3benefits of the world federation of exchangesthe world federation of exchanges provides a number of different services for financial market participants it publishes a wide array of statistics on securities markets as well as more than 350 market indicators 4the wfe also plays a role in facilitating the spread of ideas and best practices throughout the financial services industry it often convenes forums debates and conferences where industry participants can discuss important issues in financial market structure like cross border regulation or high frequency trading which is a high powered computerized system of trading 3the wfe also publishes numerous statistics many of which are contained in its annual statistics guide market participants can find in the guide such valuable information as the total market capitalization of companies listed on various stock exchanges the total value of bonds issued across the globe or the total notional value of derivatives being traded in specific markets 5derivatives typically derive their value from the underlying asset or security such as a stock it also maintains a database on initial public offerings ipos which a new equity issuance made on member exchanges 6 the wfe is governed by a board of directors which meets regularly to oversee the management of the organization 7 | |
what is a world fund | a world fund is a type of mutual fund or other investment company that invests in securities that are traded in several different countries including the united states this type of fund is sometimes also referred to as a global fund however that name should not be confused with the global fund which is a specific international organization dedicated to fighting the spread of infectious diseases such as aids malaria and tuberculosis | |
how a world fund works | world funds typically have a significant portion of their capital invested in u s listed securities but they also spread their investment capital among securities from several other countries this structure offers several valuable advantages chief among those advantages is that it limits exposure to any specific country by diversifying their portfolio these funds and their investors can help minimize their risk of a major loss since even large fluctuations in one region can often be offset and balanced out by gains in other regions this means more stability overall and less volatility and risk the returns are not relying solely on the performance of one particular economy or market at the same time this structure also limits exchange rate risks that refers to the risks involved in fluctuations in specific economies that can impact the exchange rate between currencies from one country to another some analysts argue that country diversification is no longer very effective due to globalization while others dispute this world funds vs international funds vs country fundsin the realm of investment funds several different geographically related terms can seem very similar but they have different and specific meanings along with world funds investments can also fall under the umbrella of international funds or country funds there are some critical differences between international funds and world funds and investors mustn t confuse the two international funds can invest in countries outside of the investors nation of residence for u s investors international funds invest exclusively in securities from countries outside of the united states while world funds can have up to 75 of their capital invested in u s securities in contrast country funds are mutual funds that limit their investments to securities from one particular country a country fund holds a portfolio of investments that are located exclusively in that given nation that type of fund is sometimes also referred to as a single country fund the common argument for the benefits of world funds is that while still based on the u s market world funds allow their managers to select the best securities out of the global marketplace instead of being limited to selecting only from a given country and missing out on potentially better investments | |
what is the world gold council | the world gold council or the wgc is a nonprofit association of the world s leading gold producers a market development organization for the gold industry the world gold council includes 33 members and many members are gold mining companies the wgc was established to promote the use of and demand for gold through marketing research and lobbying headquartered in london the wgc covers the markets which comprise about three quarters of the world s annual gold consumption understanding the world gold council wgc the wgc is an advocate for gold consumption the wgc aims to maximize the industry s potential growth by monitoring and defending existing gold consumption it also co sponsors research in the development of new uses of gold or of new products containing gold for example successful projects supported by the gold industry have led to the development of jewelry containing 99 gold the organization s specific purpose is to stimulate and sustain the demand for gold the story of goldgold traces its origins to ancient egypt where they first smelted gold around 3600 b c e today gold is sought after for investment purposes and is also used in the manufacturing of numerous electronic and medical devices much of the world s gold was mined in the modern postwar era and gold mining operations take place on every continent except antarctica in recent decades more countries have emerged as gold producers as a result gold mining has become less geographically concentrated and more stable today the top producing countries are china russia australia the u s canada peru and ghana 1the wgc and investing in goldgold is attractive as a commodity and an investment because gold has non monetary uses such as jewelry electronics and dentistry it retains a minimum level of real demand it is also impossible to perfectly counterfeit and has a fixed stock there is only so much gold on earth and inflation is limited to the speed of mining the wgc was the creator of the first gold exchange traded fund an exchange traded fund or etf is a marketable security that tracks an index a commodity bonds or a basket of assets like an index fund unlike a mutual fund an etf trades like a common stock on a stock exchange considered an attractive alternative investment for individual investors etfs typically have higher daily liquidity and lower fees than mutual fund shares in fact etfs experience price changes throughout the day as they are bought and sold gold experts manage the gld etfs increasing the likelihood of a positive investment | |
what is world insurance | world insurance is a type of commercial liability policy with extended global coverage world insurance provides coverage in the event the policyholder is sued anywhere in the world in general however commercial liability policies have a geographic limit for coverage multinational firms corporations with a global footprint or domestic companies that have contracts with international partners associates often obtain this type of insurance understanding world insuranceworld insurance requires the policyholder to pay an additional premium in addition to property and workers compensation insurance commercial liability insurance also referred to as general liability insurance is essential to businesses this insurance protects the assets of a business in the event it is sued for alleged bodily injury or property damages the insurer may also cover damages and legal expenses associated with covered claims involving actual or alleged product liability contractual liability personal injury advertising injury and other commercial risks as indicated in the policy it s important for organizations to understand the scope of their insurance needs for their international business operations it s critical to protect corporate assets and most insurance policies placed in the u s provide limited if any coverage for losses occurring abroad there are numerous specialized world insurance policies available to companies for conducting international business that are designed to provide global protection types of world insurancedepending on the extent of the foreign business being conducted there are several types of insurance to consider many of these and other foreign liability coverages can be packaged and purchased together and added to as business needs change this type of coverage is similar to domestic liability coverage but it s for foreign occurrences and includes protection for u s occurrences when a suit is brought outside the u s or canada this type of coverage becomes necessary if manufacturers and distributors that sell products outside of the u s are sued in foreign jurisdictions a u s based policy would only cover lawsuits that are filed in the u s or canada companies buy this to protect against physical damage and liability for hired and non owned vehicles operated overseas coverage is typically needed for limits over and above the minimum or statutory limits that are required to be purchased from the rental company in the foreign country the purpose of this coverage is to extend benefits for u s employees while traveling overseas or when assigned to work outside the u s and canada coverage can include medical assistance programs and repatriation expenses this type of insurance affords protection at unscheduled locations while in transit for laptop computers sales samples and personal property at trade shows overseas a more extensive policy may be required for owned or leased facilities a kind of coverage that protects against losses from dishonest acts perpetrated by employees overseas including forgery theft or robbery | |
what is the world trade organization wto | created in 1995 the world trade organization wto is an international institution that oversees the rules for global trade among nations it superseded the 1947 general agreement on tariffs and trade gatt created in the wake of world war ii the wto is based on agreements signed by a majority of the world s trading nations the main function of the organization is to help producers of goods and services as well as exporters and importers protect and manage their businesses on 26 february 2024 at the 13th ministerial conference in abu dhabi comoros and timor leste were approved to became the 165th and 166th members 1understanding the world trade organization wto the wto is essentially an alternative dispute or mediation entity that upholds the international rules of trade among nations the organization provides a platform that allows member governments to negotiate and resolve trade issues with other members the wto s main focus is to provide open lines of communication concerning trade among its members the wto has lowered trade barriers and increased trade among member countries it also has also maintained trade barriers when it makes sense to do so in the global context the wto attempts to mediate between nations in order to benefit the global economy 2once negotiations are complete and an agreement is in place the wto offers to interpret the agreement in case of a future dispute all wto agreements include a settlement process that allows it to conduct neutral conflict resolution 2on feb 15 2021 the wto s general council selected two time nigerian finance minister ngozi okonjo iweala as its director general she is the first woman and the first african to be selected for the position she took office on march 1 2021 for a four year term 34no negotiation mediation or resolution would be possible without the foundational wto agreements these agreements set the legal ground rules for international commerce that the wto oversees they bind a country s government to a set of constraints that must be observed when setting future trade policies 5the agreements protect producers importers and exporters while encouraging world governments to meet specific social and environmental standards 1in recent years the u s relationship with the wto has been cool the feeling is that the wto is not doing enough to counteract china s unfair trade practices 6advantages and disadvantages of the wtothe history of international trade has been a battle between protectionism and free trade and the wto has fueled globalization with both positive and adverse effects the organization s efforts have increased global trade expansion there are side effects to globalization including a negative impact on local communities and human rights 7proponents of the wto particularly multinational corporations believe that the organization is beneficial to business seeing the stimulation of free trade and a decline in trade disputes as beneficial to the global economy skeptics believe that the wto undermines the principles of organic democracy and widens the international wealth gap they point to the decline in domestic industries and increasing foreign influence as negative impacts on the world economy as part of his broader attempts to renegotiate u s international trade deals when he was in office then president donald trump threatened to withdraw from the wto calling it a disaster a u s withdrawal from the wto could have disrupted trillions of dollars in global trade however he didn t withdraw the u s from the wto during his time in office 8 | |
why is the world trade organization important | the world trade organization wto is the body that keeps global trade running smoothly it oversees the rules and mediates disputes among its member nations it now has 164 member nations and 25 observer nations out of a total 195 nations in the world | |
what are the main functions of the world trade organization | the world trade organization wto administers the trade agreements made among its member nations it also mediates any trade disputes that arise 9 | |
is the u s a member of the world trade organization wto | the u s has been a member of the wto since 1995 and signed its general agreement on tariffs and trade gatt in 1948 in 1999 then president bill clinton facilitated the acceptance of china into the wto the impact on china and on the world continues to be debated to this day 10 | |
what was worldcom | worldcom was an american telecom company at its height worldcom was one of the largest long distance providers in the united states the company is best known for being embroiled in one of the largest accounting scandals in the country which came on the heels of the enron and tyco frauds this came after it was revealed the company cooked its books worldcom was also involved in one of the largest bankruptcies of all time the company came out of bankruptcy rebranded itself and its network assets were sold to verizon understanding worldcomworldcom is now a byword for accounting fraud and a warning to investors that when things seem too good to be true they just might be the company was founded in 1983 as long distance discount service it was established after the breakup of at t by murray waldron william rector early investor bernard ebbers and their business partners the group secured a 650 000 loan which allowed them to buy the technology to route long distance calls since courts ordered at t to lease its phone lines to new companies at cheap rates ebbers who was the company s chief executive officer ceo could offer his customers very low rates this allowed him to build the company into one of america s leading long distance phone companies by acquiring as many as 30 competing telecom companies at the peak of the dotcom bubble worldcom s market capitalization grew to 186 billion | |
when the tech boom turned to bust and companies slashed spending on telecom services and equipment worldcom resorted to accounting tricks to maintain the appearance of ever growing profitability by then many investors became suspicious of ebbers story especially after the enron scandal broke in the summer of 2001 | in 2002 it was revealed that ebbers borrowed 408 million from worldcom s board of directors to cover margin calls on loans secured by company stock at the same time the company s accounting fraud and real financial situation were coming to light as the sec began to investigate as a result ebbers met his downfall and resigned as ceo on april 30 2022 in 2005 he was convicted of securities fraud conspiracy and making false filings and sentenced to 25 years in prison ebbers was a larger than life figure whose trademark was a 10 gallon hat and cowboy boots cooking the booksthere were several factors that pushed worldcom into a loss the company pursued acquisitions aggressively buying up rival companies in an attempt to gain market share this coupled with a major drop in revenue and rates pushed the company into further into the red executives needed a way to prove worldcom was still financially viable to its board and shareholders worldcom used a series of questionable accounting techniques to hide its financial position which inflated its profits this amounted to billions in capital expenditures being improperly recorded on the books but this was hardly a sophisticated fraud in order to hide its falling profitability worldcom inflated net income and cash flow by recording expenses as investments by capitalizing expenses it exaggerated income by 3 8 billion including 3 055 billion in 2001 and 797 million in the first quarter of 2002 reporting a net profit of 1 38 billion instead of a net loss to hide its falling profitability worldcom inflated its net income and cash flow by recording expenses as investments reporting a profit of 1 38 billion instead of a net loss the whistleblowersseveral individuals played a key role in exposing the fraud at worldcom these people included cynthia cooper who was vice president of worldcom s internal audit department and gene morse another auditor they became concerned about several inconsistencies in the company s financial records including cooper and morse conducted investigations on their own as well as an audit they were challenged by the company s chief financial officer cfo scott sullivan who requested that the process be delayed they contacted kpmg the external auditor that replaced arthur andersen as well as worldcom s audit committee as a result of her diligence cooper was named a person of the year by time and was featured on the magazine s cover in 2002 she is now an author consultant and internationally recognized speaker worldcom bankruptcythe company could no longer keep up once things started to unravel in fact worldcom had to adjust its earnings for the 10 year period from 1999 to 2002 by 11 billion dollars and the fraud was estimated to be in the neighborhood of 79 5 billion bankruptcy was the only option worldcom filed for chapter 11 bankruptcy on july 21 2002 only a month after its now former auditor arthur andersen had been founded guilty in court and lost its license to practice accounting by this time the company was indebted to its creditors by as much as 7 7 billion in its filing the company noted 107 billion in assets and 41 billion worth of debt the filing allowed worldcom to provide some restitution doing so allowed existing customers to continue receiving services worldcom was also able to pay its employees and keep its assets it also provided some much needed time to restructure even though it lost its luster within the corporate marketplace fallout and aftermathsome of the key personnel involved in the firm s accounting scandal received harsh punishment for their roles including debtor in possession financing from citigroup j p morgan and g e capital allowed the company to survive it emerged from bankruptcy in 2004 and rebranded itself as mci a telecom company worldcom acquired in 1997 verizon purchased mci and its assets in 2006 worldcom s former banks settled lawsuits with creditors for 6 billion without admitting liability around 5 billion went to the bondholders with the balance going to former shareholders in a settlement with the securities and exchange commission sec the newly formed mci agreed to pay shareholders and bondholders 500 million in cash and 10 million shares of mci this spate of corporate crime led to the sarbanes oxley act in july 2002 which strengthened disclosure requirements and the penalties for fraudulent accounting in the aftermath worldcom left a stain on the reputation of accounting firms investment banks and credit rating agencies that had never quite been removed who was to blame although no one actually admitted their part in the scandal there were several players who were at fault some within the company and others who weren t even employed by worldcom arthur andersen an accounting firm that audited worldcom s 2001 financial statements and reviewed worldcom s books for q1 2002 was found to have ignored memos from worldcom executives informing them that the company was inflating profits by improperly accounting for expenses key management personnel including worldcom ceo bernie ebbers and cfo scott sullivan the company s board of directors and its internal audit team were also singled out for their lack of oversight ignoring of accounting principles and committing fraud ebbers and his lawyer initially denied any involvement or knowledge of the fraud these claims were refuted by a wall street journal report which cited internal communications to the contrary wall street analyst jack grubman gave the company consistently high ratings even though the company along with other telecoms performed poorly grubman was fired from his job at salomon smith barney and was fined 15 million by the sec he was also banned from any activity in securities exchanges | |
what happened to worldcom | worldcom was a telecommunications company that provided discount long distance services to its customers the company was embroiled in one of the largest accounting scandals in the united states which led to an equally large bankruptcy filing the company used fraudulent accounting practices to cover up its losses by making itself look more profitable than it was several individuals were concerned about fraudulent financial transactions and reported the inconsistencies to authorities its bankruptcy helped the company restructure rebranding itself as mci this new entity was sold to verizon in 2006 who was involved in the worldcom scandal several key individuals and entities were involved in the worldcom scandal some of the most notable names include its ceo bernie ebbers cfo scott sullivan and the company s auditing firm arthur andersen wall street analyst jack grubman also played a role in providing the telecom company with positive ratings cynthia cooper was a key player in bringing attention to the company s financial inconsistencies together with auditor gene morse cooper investigated and reported worldcom s questionable accounting practices she was named a person of the year by time in 2002 | |
what happened to cynthia cooper | cynthia cooper was largely responsible for bringing attention to worldcom s questionable accounting practices she discovered several inconsistencies in the company s financial statements and reported them to auditors and the company s board in her book extraordinary circumstances the journey of a corporate whistle blower cooper said it was a difficult time in her career but she was awarded by time by being named a person of the year in 2002 she is now a speaker and consultant the bottom lineworldcom was a telecommunications company that prided itself on providing its customers with affordable long distance services but an aggressive acquisition strategy and falling revenues led the company to a downward spiral that would ultimately open the door to one of the largest accounting frauds and bankruptcies in the united states the company used fraudulent accounting techniques to hide its losses while making itself look more profitable than it was which helped it retain its place as a darling among investors although it managed to restructure and emerge from bankruptcy worldcom s example helped corporate management teams and investors learn a valuable lesson if something looks too good to be true it probably is | |
what is worldwide coverage | worldwide coverage is a characteristic of some insurance policies provided by insurance companies that globally covers the insured business or individual against loss or damage worldwide coverage ensures that no matter where an individual s personal property is lost stolen or damaged they will be covered for any associated losses it also covers certain aspects of financial loss to a business understanding worldwide coveragecertain insurance policies such as personal property insurance allow policyholders to add worldwide coverage to their existing policy usually for an additional premium the worldwide coverage can be requested in the amount needed for valuable possessions some limits apply to certain types of property and some properties might be excluded from coverage depending on the insurance company typically because of the different laws in different countries worldwide coverage only applies to property issues related to the obtrusion of business and crime it s critical to understand where your insurance applies before finalizing your business or personal insurance some insurance companies distinguish between blanket coverage which involves coverage of items between certain prices and scheduled coverage for individual items that may fall outside of blanket coverage values the latter requires detailed documentation and a bill of purchase attesting to the cost price in some cases worldwide coverage may only be valid for a certain period of time examples of covered items include jewelry furs cameras musical instruments silverware goldware golf equipment fine art such as paintings vases antique furniture oriental rugs rare glass and china collectibles sports equipment and computer equipment coverage territoriesinsurance is a location based business nearly every type of policy assumes it will be in force in a stated geographic area known as the coverage territory most liability policies for example only cover incidents that occur in the coverage territory 3 most policies issued in the u s include the u s with its territories and possessions puerto rico and canada they would also cover international waters or airspace if the injury or damage occurs while a person or property is traveling between the u s puerto rico and canada 3 for an additional cost policies can include anywhere in the world other than the u s puerto rico and canada for a business this might include liability for products used or sold outside the u s or even claims arising from something a business put on the internet that was accessed in another country the limitation for many of these policies is that any suit must be brought in the u s puerto rico or canada 3 types of insurance and their coverage territorystandard commercial auto policies include the u s puerto rico and canada 1 insurance for driving in mexico for example must be bought in that country or as a rider to a standard u s policy auto policies for private vehicles are worldwide with certain stipulations 4 workers compensation insurance applies to the state it s purchased in and the laws that that state created some workers compensation insurance does extend to employees who are traveling in other states and overseas on a temporary basis 2 homeowners insurance is tied to the property insured but certain theft and liability coverage can extend to the location of the policyholder in another state or country but only under certain limited circumstances 5 most health insurance policies cover any health issues that occur worldwide for example if you have a health insurance policy from a u s insurer but break your leg skiing in france and have to go to the hospital your health insurance policy will most likely cover that 6 | |
what is worldwide income | in the united states worldwide income describes an aggregation of a taxpayer s domestic and foreign income worldwide income is income earned anywhere in the world and is used to determine taxable income in the u s citizens and resident aliens are subject to tax on worldwide income 1 understanding worldwide incomethe irs demands to know about all of a taxpayer s worldwide income taxable or otherwise 1 money that is paid to u s citizens or resident aliens as wages independent contractor payments or unearned income from pensions rents royalties and investments may all be subject to tax by the irs 2 there are some exceptions for u s taxpayers who live abroad 3 measuring worldwide incomethe most comprehensive measure of worldwide income includes a total aggregation of revenue generated by a tax paying entity from all sources that includes foreign domestic passive and active income from operations and investments each source of revenue must be reported to the irs for tax purposes 1 4 the irs can allow an exclusion or tax credit for a certain portion of earnings generated by u s citizens who ve worked abroad this exclusion or credit may take effect to avoid the problem of double taxation which would arise if a taxpayer has already paid taxes to another jurisdiction not the u s 5 6 multinational corporations and wealthy individuals usually take advantage of international tax specialists a specialty among both lawyers and accountants to decrease or otherwise shelter their worldwide tax liabilities these tax strategies can delay tax payments which can lead to compound growth and material increases in capital bases with any system of taxation creative tax advisors can shift or recharacterize income in a manner that reduces taxation in turn many jurisdictions often impose rules relating to shifting income among commonly controlled parties often referred to as transfer pricing rules residency based systems are subject to taxpayer attempts to defer recognition of income through the use of related parties a few jurisdictions impose rules limiting such deferral agreements among governments treaties often attempt to reconcile who should be entitled to tax what most of these tax treaties offer at minimum a base mechanism for resolution of disputes between parties | |
what are worthless securities | worthless securities can include stocks or bonds that are either publicly traded or privately held to declare a capital loss from worthless securities the internal revenue service irs suggests investors treat them as if they were capital assets sold or exchanged on the final day of the tax year as with other securities investors must first figure out the holding period to determine if the capital loss is short term one year or less or long term greater than one year in the case of a short term loss investors must report this on part i of schedule d investors can net short term gains and losses against one other to determine a net short term gain or loss for long term losses investors report these in part ii of schedule d again investors can net long term gains and losses against each other to determine the net long term gain or loss after the investor completes these calculations separately in parts i and ii of schedule d they can net them together for an overall result you may be able to use a worthless security in a tax strategy called tax selling where an investor sells an asset with a capital loss in order to lower or eliminate the capital gain that they realize via other investments understanding worthless securitiespublic company market value also known as market capitalization is the number of outstanding shares of a publicly traded company multiplied by the current share price for a private company valuation methods include comparable company analysis or an estimation of discounted cash flows worthless securities will have a market value of zero as noted above for a security to become worthless it not only needs to have no value but it needs to have no potential to regain value for example a company s stock might reduce in value to zero if the market fluctuates enough if the company has a chance to regain ground in the market it would not be worthless stock however if the company closed its doors after bankruptcy its stock would likely be worthless worthless stocks vs penny stocksworthless stocks have a market value of zero while penny stocks generally have market values of less than 5 however penny stocks have the potential to become worthless securities because of their small market value penny stocks typically trade outside the major market exchanges through the otc markets group and pink sheets at a relatively low price 5 or less these stocks are considered highly speculative and high risk due to their lack of liquidity large bid ask spreads small capitalizations and limited followings and disclosures some examples of penny stocks are | |
how do i report worthless securities | if you have a worthless security you ll need to file irs form 8949 make sure you have the dates you purchased it the date you sold it and the amount you paid and received available | |
when can you claim a worthless stock | you can claim a worthless stock in the tax year in which it becomes worthless | |
how are worthless securities taxed | they are taxed as a capital loss and can be claimed in the year the security becomes worthless 1 | |
what is the w p carey school of business | the w p carey school of business is a business school that is part of the arizona state university system previously known as the arizona state university department of commerce it received its current name following a 50 million donation by the w p carey foundation 1the school ranks highly in domestic and international university rankings often scoring in the top 50 among business schools and in the top 100 among schools overall 2w p carey school of business history and academicstoday the w p carey school of business is home to an academic staff of over 300 and is attended by about 20 000 students 3 its namesake benefactor william polk carey was a prominent businessman and philanthropist who founded the new york based real estate firm w p carey co 4 prior to his donation to the w p carey school of business he also donated funds to the carey school of law at the university of maryland and the carey business school at johns hopkins university 5originally founded in 1961 the w p carey school of business is located in tempe arizona it offers a well known master of business administration mba program in different formats including an online degree other master s degrees are also offered in areas such as accounting data science finance logistics and real estate development 6the undergraduate class of 2022 reported an average starting salary of 56 404 3w p carey school of business success storiesthe w p carey school of business received widespread acclaim in 2015 when it announced a new program to provide tuition free mba program for its incoming class of students the move was part of the university s efforts to increase diversity in its student body by decreasing the financial barriers faced by incoming students 7the university is also notable for its large alumni community which is over 120 000 individuals as of 2023 8 among them are many prominent figures in a diverse range of industries such as michael ahearn ceo of first solar fslr bill post ceo of pinnacle west capital corporation pnw and eric crown co founder of insight enterprises nsit 91011w p carey school of business demographicsthe w p carey school of business at arizona state university boasts a diverse student body with students hailing from over 100 countries the school offers a broad spectrum of academic pathways providing students with over 50 ways to earn a w p carey degree in fall 2022 the school reported a significant enrollment including 18 456 undergraduate students 1 753 international undergraduates 627 mba students 618 specialized master s program students and 141 doctoral students notably the school demonstrated strong retention rates as 84 1 of first year w p carey undergraduates returned for their second year at asu this exceeded the national average for public four year institutions which stood at 82 upon graduation students benefit from a vast and influential alumni network comprising more than 100 000 w p carey alumni who continue to advance their careers and make an impact on their respective organizations in the 2022 23 academic year the school conferred a diverse range of degrees including 3 709 total undergraduate degrees 12william polk careythe w p carey school of business is named after the late william polk carey a visionary real estate investor generous philanthropist and a significant benefactor of arizona state university asu in 2003 mr carey made a remarkable 50 million donation through his educational and philanthropic foundation to the asu business school marking the second largest gift ever made to a u s business school at that time 13carey emphasized the importance of quality education for future economic growth and envisioned the school as a platform for nurturing the next generation of american business leaders in appreciation of his exceptional support asu renamed the business school in his honor carey s generous gift played a pivotal role in propelling the w p carey school of business into the ranks of the world s top business schools mr carey s passing in january 2012 marked the end of an illustrious 60 plus year career in the finance industry 13 | |
what academic programs does the w p carey school offer | the school offers a diverse portfolio of academic programs including undergraduate degrees in areas like business administration and specialized master s programs in fields such as finance marketing and supply chain management it also provides various mba options and doctoral programs | |
what is w p carey s mission | the school s mission emphasizes a commitment to creating new knowledge through research and educating principled innovative leaders the school s mission statement is to spark positive change in business and society by educating students growing talent producing groundbreaking research and engaging with a variety of communities 13 | |
what are the admission requirements for prospective students | admission requirements vary by program but typically include criteria such as academic qualifications standardized test scores gmat or gre for graduate programs letters of recommendation and application essays note that w p carey does encourage students to ask about gmat and gre waivers 13the bottom linethe w p carey school of business at arizona state university is a renowned institution known for its rich history commitment to innovation and emphasis on ethical business leadership with a diverse student body hailing from over 100 countries it offers a wide array of academic programs including undergraduate master s and doctoral degrees | |
a brokerage firm professionally manages a wrap account for a flat fee charged quarterly or annually the fee is based on the assets under management aum wrap account fees should cover all administrative commission and management expenses 1 wrap fees range from about 1 to 3 of aum 2 for many investors a wrap account can be less expensive over time than a brokerage account that charges commissions for each trade however buy and hold investors who rarely trade might be better off with commission based fees | understanding the wrap accountwrap accounts have the advantage of protecting the investor from overtrading which can occur if a broker trades for the account excessively just to generate more commission income this is known as churning in a wrap account the broker is paid a fee based on a percentage of the assets in the account thus brokers paid through these fees should have their incentives aligned with their investors wrap accounts vs traditional accountsa wrap account offers an individual investor access to professional money managers who work primarily with institutions and high net worth individuals mutual fund companies also offer wrap accounts with access to a large selection of mutual funds 3a wrap account may require a minimum investment of 25 000 to 50 000 the fees pay for marketing and distribution costs as well as for the brokers who sell the funds and work with clients this fee is extra if you re already in a mutual fund wrap account investors who buy and hold stocks long term may be better off with a traditional fee structure advantages and disadvantages of wrap accountswrap accounts offer perks that make them worth considering one is that they give everyday investors access to professional portfolio management though 25 000 or 50 000 isn t a small amount it s feasible for many investors another benefit is that the fee for a wrap account is easy to understand you should always know what you re paying and not worry about too many fees if the manager makes many trades you can also feel confident that the portfolio manager s and your interests are aligned because their compensation will increase as your portfolio grows wrap accounts can also be customizable you can set investment goals and select strategies that align with your risk tolerance time horizon and other personal preferences you should also receive detailed reports making it easier to track performance understand how your assets are invested and assess how well your portfolio is doing to meet your goals the fee though can be a drawback you might pay as much as 3 per year to get access to a wrap account which can be a drag on your long term returns if you just want to build a long term portfolio you ll likely pay less with a traditional investing account the other drawback is that you shouldn t worry about excessive fees but the transparency for many investors has been less than robust those investing in wrap accounts now have ample warning from headlines over the last decade to ensure they aren t routed by their brokers to third party sites or put on the hook for additional fees aig affiliates raymond james associates kovack advisors morgan stanley and robert w baird co are just some of the companies that have settled with the securities and exchange commission sec for claims they boosted fees beyond those included in their wrap account programs and without transparency while doing so 14567it s also the case that it s a far better time than when wrap accounts were introduced for clients to lower their fees for example you could use a robo advisor which offers similar portfolio management services but typically at a much lower cost other considerationsa wrap account works best for investors who want a degree of hands on management and advice investors with a buy and hold strategy for their portfolio may be better off paying occasional trading fees than wrap account fees which could be higher in the long run for example an income oriented investor may hold a portfolio of dividend paying stocks and bonds and make few if any changes for years if the investor then sells the stocks substantial capital gains taxes could be owed because the cost basis of each stock may be far below the current market price these investors may be better off maintaining the status quo in their portfolio to earn dividend income no capital gain taxes are incurred and no commissions or wrap fees are paid moving the assets into a wrap account would have generated more costs and reduced the investor s total return | |
what do brokerages typically charge for commission | historically commissions and brokerage fees were much higher than they are today investors may have paid as much as 30 or more for a single trade now many companies offer commission free stock trades and commissions are generally lower | |
why is it called a wrap account | wrap accounts got their name because all the fees you usually pay in an investment account are wrapped into a single easier to understand expense | |
what fees are included in the wrap fee | the wrap fee you pay covers all the services for your wrap account these fees typically include administrative costs brokerage fees investment advice third party services and other fees 1can you trade derivatives in a wrap account yes depending on the investment company you choose to work with you may be able to trade a wide variety of securities including derivatives in your wrap account the bottom linewrap accounts offer professional portfolio management for a simple easy to understand fee with minimums in the 25 000 range they re accessible to many investors a wrap account may be a good fit if you d like to build a complex portfolio or execute a complicated strategy traditional investment accounts may offer lower fees if you re a long term buy and hold investor | |
what is a wrap around insurance program | a wrap around insurance program is a policy that provides punitive damages coverage for employment practices liability claims should a legal recompense in excess of compensatory damages be awarded to a plaintiff to punish a defendant and deter them from committing future punitive actions this form of insurance will help to cover those costs understanding a wrap around insurance programa wrap around insurance program is also referred to as a wrap around policy because it is set up in conjunction with an employment practices liability insurance epli policy epli insures against claims from employees that employers have violated their rights eligible claims for such lawsuits can range from any form of discrimination to wrongful termination the most common award from these types of lawsuits is punitive or monetary damages these are usually issued to cover a range of needs including medical costs loss of income and pain and suffering employers carry epli policies to cover the costs they could incur if legal action is pursued if an employee feels that workers compensation does not adequately cover their loss perhaps because they feel their employer s negligence caused their injury they may decide to sue their employer for punitive damages such as pain and suffering epli addresses this risk and is designed to cover expenses not protected by workers compensation or general liability insurance a mainly mandatory form of insurance that provides some level of coverage for medical expenses and lost wages for employees or their beneficiaries when injured falling sick or killed as a result of their job employment practices liability insurance epli places limits on the amounts paid out per employee per injury or per illness types of wrap around insurance programsthere are other instances of the term wrap around insurance being used that do not include employee versus employer interactions these include secondary or ancillary insurance policies for health and life insurance coverages when a singular policy does not meet current needs or is not estimated to meet future needs another form of a wrap around insurance program is also employed to protect against political risk companies may take out this type of policy to shield themselves in the event that a foreign government engages in activities that cause it a financial loss under this category of wrap around insurance protection is provided for deprivation acts of government embargo sanction partial loss and forced abandonment 1 special considerationspunitive cases fall under the civil court s jurisdiction 2 and while there is still a defendant there is no prosecutor as there is during a criminal case the plaintiff is usually seeking restitution for a financial loss of some sort and must hire an attorney to act on their behalf and provide counsel defendants in criminal cases on the other hand can request an attorney at a cost to the state if they cannot reasonably afford one furthermore with a civil case there is no threat of jail time or a criminal conviction there s usually no jury either most civil cases are tried and decided solely in front of a judge | |
what is a wrap around loan | a wrap around loan is a type of mortgage loan that can be used in owner financing deals this type of loan involves the seller s mortgage on the home and adds an additional incremental value to arrive at the total purchase price that must be paid to the seller over time understanding wrap around loansthe form of financing that a wrap around loan relies on is commonly used in seller financed deals a wrap around loan takes on the same characteristics as a seller financed loan but it factors a seller s current mortgage into the financing terms seller financing is a type of financing that allows the buyer to pay a principal amount directly to the seller seller financing deals have high risks for the seller and usually require higher than average down payments in a seller financed deal the agreement is based upon a promissory note that details the terms of the financing in addition a seller financed deal doesn t require that principal be exchanged upfront and the buyer makes installment payments directly to the seller which include principal and interest 1wrap around loans can be risky for sellers since they take on the full default risk on the loan sellers must also be sure that their existing mortgage does not include an alienation clause which requires them to repay the mortgage lending institution in full if collateral ownership is transferred or if the collateral is sold alienation clauses are common in most mortgage loans which often prevent wrap around loan deals from occurring | |
how a wrap around loan works | wrap around loans build on the owner financing concept and deploy the same basic structuring a wrap around loan structure is used in an owner financed deal when a seller has a remaining balance to pay on the property s first mortgage loan a wrap around loan takes into account the remaining balance on the seller s existing mortgage at its contracted mortgage rate and adds an incremental balance to arrive at the total purchase price in a wrap around loan the seller s base rate of interest is based on the terms of the existing mortgage loan to break even the seller must at least earn interest that matches the rate on the loan which still must be repaid thus a seller has the flexibility to negotiate the buyer s interest rate based on their current terms generally the seller will want to negotiate the highest possible interest rate in order to make payments on the first mortgage and also earn a spread on the deal example of a wrap around loanlet s say that joyce has an 80 000 mortgage outstanding on her home with a fixed interest rate of 4 she agrees to sell her home to brian for 120 000 who puts 10 down and borrows the remainder or 108 000 at a rate of 7 joyce earns 7 on 28 000 the difference between 108 000 and the 80 000 she still owes plus the difference between 7 and 4 i e 3 on the balance of 80 000 mortgage | |
what is a wrap fee | a wrap fee is an all inclusive charge for the services of an investment manager or investment advisor the wrap fee generally covers investment advice investment research brokerage services and administrative fees the fee is based on the assets in the account and generally ranges from 1 to 3 per year of the assets under management the wrap fee simplifies investing costs and makes them more predictable it may be a good option for an actively engaged investor who regularly demands the full services of an investment manager or advisor it could be less beneficial to an investor who is holding onto a portfolio of investments for the long term and does not intend to frequently alter it | |
when given the choice the wise investor finds out exactly what is included and not included in the wrap fee every firm creates its own wrap fee program and some are less comprehensive than others | an investment advisor must provide clients with a wrap fee brochure listing the services that are included in the fee understanding wrap feesthe benefit of a wrap fee is its predictability the investor knows up front what the cost will be for the year no matter how little or how much of the advisor s services are used there may be services or fees that are not included in the wrap fee investment firms are required to provide a wrap fee brochure detailing the services and costs that are included in the fee choosing a wrap fee can be a good option for investors who intend to use their broker s full line of services since it covers all the direct services the customer receives the wrap fee includes charges like commissions trading fees advising fees and other investment expenses the fee also may cover the administrative costs of the investment firm investors must decide whether the services they routinely demand from their advisors make paying a 1 to 3 charge worth it the investor who builds a solid portfolio and leaves it alone through market ups and downs may find it cheaper to pay the individual one time fees charged for occasional adjustments special considerationswrap fee programs can have a variety of names such as asset allocation programs investment management programs asset management programs separately managed accounts and mini accounts whatever the name this type of account can be subject to additional disclosure under rule 204 3 f of the investment advisers act of 1940 this rule defines a wrap fee as a program under which any client is charged a specified fee or fees not based directly on transactions in a client s account for investment advisory services which may include portfolio management or advice concerning the selection of other advisers and execution of client transactions 1in december 2017 the securities and exchange commission sec released an investor bulletin that provides basic information about wrap fee programs and some questions to consider asking an investment advisor before choosing to open an account in a wrap fee program 2advantages and disadvantages of wrap feeswrap fees provide investors with some sense of predictability they know in advance what the costs of their accounts will be no matter how much or how little they demand from their advisors one common complaint against some brokers is that they make excessive trades in order to earn more trading commissions the wrap fee removes any incentive to trade frequently the downside of the wrap fee is that some investors may be paying for a level of service that they don t use passive investors could be over paying for advice and research that they have no intention of using conservative investors might find that the wrap fee at 1 to 3 eats most of their annual investment returns investors who have most or all of their assets in exchange traded funds aren t looking for word of the next big breakout stock the pay as you go plan might be a better choice in those cases either way investment fees can erode returns as mentioned above wrap accounts may charge anywhere between 1 to 3 of the total assets under management a pretty hefty price tag especially for investors with a small nest egg people who can t afford wrap fees and those who prefer a passive buy and hold strategy may be better off with individual investments furthermore investors with wrap accounts may be on the hook for additional fees such as a mutual fund with an expense ratio | |
what is a reasonable wrap fee | the normal wrap fee is 1 to 3 per year of the assets under management whether that s reasonable depends on what it covers the wrap fee may not include certain charges securities exchange commission sec regulations require that investment advisors give their clients a wrap fee program brochure stating what services and charges are included in the fee the investor may still have to pay some fees such as those charged by a mutual fund provider or charges related to third party providers even some uncommon brokerage fees may not be covered in a wrap fee 2 | |
is a wrap fee worth it | whether it s worth it to pay a wrap fee depends on how much service you demand from your investment advisor and how often if you are confident that your money is in good hands and you don t need to revisit your investment decisions regularly you may not need a wrap fee the wrap fee generally covers professional advice and research services trading fees and related administrative costs if you aren t using all of those services frequently you may be better off with the standard pay as you go plan | |
how is a wrap fee calculated | every investment advisory firm creates its own wrap fee program so the precise terms vary luckily the firm is required to give you a wrap fee brochure detailing exactly what services are covered you might ask the advisor whether a wrap fee or per use fees is better for you and why | |
what is wrap up insurance | wrap up insurance is a liability policy that serves as an all encompassing insurance that protects all contractors and subcontractors working on large projects costing over 10 million the two types of wrap up insurance are owner controlled and contractor controlled 1owner controlled insurance is set up by the owner of a project for the benefit of the builder or contractor to cover all listed contractors the general contractor meanwhile may use a contractor controlled insurance program to extend coverage to all the contractors and subcontractors signed up on the project 2understanding wrap up insurancethe intent of a wrap up insurance policy is to provide peace of mind that everyone involved in a project is insured properly wrap up insurance is sweeping blanket coverage that protects the owner contractors and subcontractors 1 wrap up insurance is important because it avoids the need for every contractor and subcontractor to obtain their own liability insurance if there were several policies there might be gaps in the coverage or insufficient limits instead wrap up insurance is more effective at making sure that all of the liability risks are covered adequately for example consider an owner controlled insurance program purchased by the owner on behalf of the builder or contractor counting add ons the insurance includes workers compensation general liability excess liability pollution liability professional liability builder s risk and railroad protective liability while the cost of wrap up insurance can be expensive the cost can be divided among the general contractors and sub contractors types of wrap up insurance coveragewrap insurance covers a number of risks for you your project and your workers policies can vary but may include this covers all liabilities for a project including bodily injury coverage against third party injuries that occur on the site or if those injuries are the result of work related activities by the contractor subcontractor or owner also it protects third party property against damage caused by anyone covered under the policy 3builders risk covers for any water weather and fire damages to a building under construction in other words builders risk is essentially the same as property insurance except this covers buildings under construction 4umbrella insurance provides coverage beyond the coverage limit for a general liability policy 5 for example let s say a general liability policy covers up to 2 million in damages and the umbrella liability policy provides 10 million in coverage if there was a 8 million dollar claim the general policy would cover first 2 million while the remaining 6 million from the claim would be covered by the umbrella policy workers compensation provides coverage for workers compensation insurance to all of the enrolled contractors or subcontractors on the project 6commercial vehicle insurance covers cars vans trucks or specialty vehicles used on the construction project against liability claims and property damage 7this covers property damage of all the parties named on your policy also equipment floaters for specialized equipment and tools can be added as well as inland marine insurance for tools and equipment that have been transported to and from the job site 8wrap up insurance policies may have specific exclusions be aware that any of the items mentioned above may be explicitly disallowed from coverage | |
how to secure wrap up insurance coverage | there are specific steps that often must be taken in sequential order for wrap up insurance coverage to be secured first the development team must examine the project s scope size and length to determine whether wrap up insurance is appropriate think about things like the project s type projected costs schedule for completion and any potential risks 9to discuss the project and the potential inclusion of a wrap up insurance program hold pre bid meetings with prospective contractors subcontractors and insurance providers this enables stakeholders to know what to expect and what is expected of them right away this will also flag limitations early in the construction schedule process the project owner often chooses whether to undertake a wrap up insurance program based on the advice and evaluation given by insurance experts it is up to the project owner to select an insurance provider or underwriter the choice is made based on the provider s qualifications standing financial stability scope of coverage and cost the terms and conditions of wrap up insurance may be negotiated though be mindful that underwritten calculations have often been substantiated and approved by the issuing company you must also be mindful of specific terms such as coverage limits the length of the insurance the precise coverages included the deductibles the exclusions and any further endorsements necessary after acquiring the wrap up insurance policy inform all contractors and subcontractors participating in the project of the coverage make sure they are aware of the policy s roles obligations and responsibilities establish processes for reporting documenting and addressing claims as well as ongoing oversight and policy compliance with each impacted party | |
when development ends your wrap up insurance coverage will need to transition to coverage for operations at this time coverage will likely move to an individual as need basis | limitations of wrap up insurancewrap up insurance has some restrictions wrap up insurance policies are intricate and call for careful planning and coordinating they require input from the project owner general contractors subcontractors and insurance firms therefore coverage requires substantial collaboration as it can be difficult to coordinate coverage secure suitable restrictions and manage the different stakeholders given the size and high value of the projects it covers wrap up insurance can be pricey 10 the premiums deductibles and other expenses related to obtaining and managing the insurance as well as any administrative fees may be substantial due due to complexity and uncertainty with long term projects the project budget may need to account for these higher expenses wrap up insurance frequently offers protection for particular projects or construction phases but may not cover all facets of a project a wrap up policy may not cover some risks such as professional responsibility design flaws or pollution liabilities project leads must be mindful of these gaps that may call for additional insurance coverage on a related note wrap up insurance contracts frequently contain a number of exclusions limitations and conditions even in the realms they do cover for instance these might restrict coverage for particular types of claims or losses for example the office of general counsel for new york has set forth restrictions for wrap up insurance for public development projects 11last wrap up insurance may not always be easily accessible or reasonably priced depending on the location and nature of the project insurance companies may have special requirements or limits before selling them in addition the inherent risk of a specific build may be so large that it is cost prohibit or administratively not feasible for any third party insurer to agree to take on the risk | |
what is the difference between an ocip and wrap up insurance | ocip owner controlled insurance program and wrap up insurance are both types of insurance policies used in construction projects the main difference lies in who obtains and controls the insurance coverage in an ocip the project owner purchases and manages the insurance while with wrap up coverage the general contractor or project sponsor obtains and oversees the policy 1 the coverage provided and the parties covered may vary in each type of insurance | |
what is the primary benefit of wrap up insurance coverage | the primary benefit of wrap up insurance coverage is that it consolidates insurance coverage for all contractors and subcontractors involved in a construction project under a single policy this streamlines the insurance process reduces administrative burdens and can lead to cost savings for project stakeholders | |
what is a wrap up exclusion | a wrap up insurance exclusion refers to specific risks or coverages that are explicitly excluded from the coverage provided by a wrap up insurance policy these exclusions outline the risks or situations that are not protected under the policy and may require separate insurance arrangements or endorsements to address those excluded risks the bottom linewrap up insurance is a comprehensive insurance policy used in construction projects it provides coverage for all contractors and subcontractors involved in the project under a single policy it simplifies the insurance process reduces administrative costs and offers potentially significant cost savings the policy typically includes general liability workers compensation and excess liability coverage for the duration of the project | |
what is a wraparound mortgage | a wraparound mortgage is a type of junior loan which wraps or includes the current note due on the property the wraparound loan will consist of the balance of the original loan plus an amount to cover the new purchase price for the property these mortgages are a form of secondary financing the seller of the property receives a secured promissory note which is a legal iou detailing the amount due a wraparound mortgage is also known as a wrap loan overriding mortgage agreement for sale or all inclusive mortgage 1 | |
how a wraparound mortgage works | frequently a wraparound mortgage is a method of refinancing a property or financing the purchase of another property when an existing mortgage cannot be paid off the total amount of a wraparound mortgage includes the previous mortgage s unpaid amount plus the additional funds required by the lender the borrower makes the larger payments on the new wraparound loan which the lender will use to pay the original note plus provide themselves a profit margin 1 depending on the wording in the loan documents the title may immediately transfer to the new owner or it may remain with the seller until the satisfaction of the loan a wraparound mortgage is a form of seller financing that does not involve a conventional bank mortgage with the seller taking the place of the bank 2since the wraparound is a junior mortgage any superior or senior claims will have priority in the event of default the original mortgage would receive all proceeds from the liquidation of the property until it is all paid off wraparound mortgages are a form of seller financing where instead of applying for a conventional bank mortgage a buyer will sign a mortgage with the seller the seller then takes the place of the bank and accepts payments from the new owner of the property 2 most seller financed loans will include a spread on the interest rate charged giving the seller additional profit 1wraparound mortgage vs second mortgageboth wraparound mortgages and second mortgages are forms of seller financing a second mortgage is a type of subordinate mortgage made while an original mortgage is still in effect the interest rate charged for the second mortgage tends to be higher and the amount borrowed will be lower than that of the first mortgage 3a notable difference between wraparound and second mortgages is in what happens to the balance due from the original loan a wraparound mortgage includes the original note rolled into the new mortgage payment 1 with a second mortgage the original mortgage balance and the new price combine to form a new mortgage 3example of a wraparound mortgagefor example mr smith owns a house that has a mortgage balance of 50 000 at 4 interest mr smith sells the home for 80 000 to mrs jones who obtains a mortgage from either mr smith or another lender at 6 interest mrs jones makes payments to mr smith who uses those payments to pay his original 4 mortgage mr smith makes a profit on both the difference between the purchase price and the original owed mortgage and on the spread between the two interest rates depending on the loan paperwork the home s ownership may transfer to mrs jones however if she defaults on the mortgage the lender or a senior claimant may foreclose and reclaim the property | |
what is a writ | the term writ refers to a formal legal document that orders a person or entity to perform or to cease performing a specific action or deed writs are drafted by judges courts or other entities that have administrative or judicial jurisdiction 1 these documents are part of common law and are often issued after a judgment is made giving those involved in a suit the ability to carry out the judgment writs can take many forms including summonses writs of execution writs of habeas corpus warrants and orders | |
how writs work | a writ is a document or order that directs any form of action from a court it provides directions from an entity with jurisdictional or administrative power to another party writs were developed as part of the english common law system and were primarily issued by anglo saxon monarchs these writs were written decrees that consisted of administrative commands written in layperson s terms largely authenticated by a royal seal at the bottom of the document upon issue writs advised courts of land granting conveyances in some cases they were also used to carry out judicial orders while many writs were deemed open and read aloud in public others were meant merely for the party or parties named 2writs were developed over time as a way for authorities legal and otherwise to direct others to perform specific actions this means that a modern day writ provides an order from a higher to a lower court from a court to an individual or other entity or from a government agency to another party the writ may command the named party to take some form of action or prevent that party from continuing to act or operate in a certain way present day courts also use writs to give extraordinary relief or provide rights to appeal court decisions in other cases they give authorities such as sheriffs the right to seize property this can even occur in anticipation of a judgment types of writsany direct order that is issued under authority is a writ warrants and subpoenas are two common types of writs a warrant is a writ issued by a judge or magistrate that allows a sheriff constable or police officer to search a person or property commonly known as a search warrant other warrants include an arrest warrant for an individual or individuals and an execution warrant allowing the execution of an individual who has been sentenced to death in a trial court a subpoena is a writ that compels a witness to testify or compels an individual or organization to produce evidence certain writs were eliminated because the relief that used to be available only through a writ is now accessible through a lawsuit or a motion in a civil action you may find relief by filing a lawsuit or a motion in civil court when getting a writ in your favor isn t an option example of a writa writ of execution is a court order that allows a piece of property to be transferred from one party to another the plaintiff or injured party must commence legal action against the defendant in order to get this court order once the writ is drafted the property is seized by a court official or member of law enforcement the property is then transferred or sold with the proceeds going to the plaintiff in cash another example of a writ is the writ of seizure and sale when this writ is drafted by a court it gives the petitioning party the right to take over ownership of a piece of property from someone else in most cases the petitioner is normally a creditor who is allowed to seize property from a borrower when the latter defaults on their financial obligation once seized the property can be sold in order to recoup any losses by the creditor writs of habeas corpus and certiorari are both used by courts for legal purposes usually in favor of a defendant a writ of habeas corpus can be used to evaluate the constitutionality of criminal convictions delivered by state courts when the writ is issued a public official is ordered to produce an imprisoned individual before the court to determine whether their confinement is legal 3 these writs are useful when people are imprisoned for long periods of time before they re actually convicted or charged with a crime the writ of certiorari on the other hand is used by the u s federal courts this writ is issued by the supreme court of the united states to a lower court to review that court s judgment for legal error or when no other avenue for appeal is available 4 | |
where does the word writ come from | the etymology of the word writ comes from old english as a general term denoting written matter which is itself from the old germanic base of write gewrit | |
where did writs originate | writs developed in the middle ages in england originally for the king s court to settle land ownership and title disputes or lodge complaints against landowners | |
how are writs used in american law | initially the american government adopted the writ system it inherited from the british in 1798 congress passed the all writs act which authorized the united states federal courts to issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law 5 a 1938 supreme court ruling greatly curtailed the widespread use of writs in civil cases though courts today may still use writs to issue injunctions 6 note also that the writ of habeas corpus usually used to test the legality of a prisoner s detention continues to exist | |
what is a writ of attachment | a writ of attachment is a form of prejudgment process in which a court orders the attachment or seizure of property described in the writ the property is seized and held in the custody of an appointed official such as a u s marshal or law enforcement officer under court supervision a writ of attachment demands the creditor s property prior to the outcome of a trial or judgment whereas a writ of execution directs law enforcement to begin the transfer of property as the result of the conclusion of a legal judgment | |
how a writ of attachment works | a writ of attachment is generally used to freeze a defendant s assets pending the outcome of legal action that is the plaintiff who is the party bringing the legal action against the defendant obtains a contingent lien on the defendant s assets the lien is a legal charge to take ownership of the defendant s property to satisfy a debt the writ of attachment allows the lien to be exercised should the plaintiff successfully obtain a judgment against the defendant there are several different types of attachment in debt collection outside of bankruptcy action a writ of attachment from the civil court system is one tool available to creditors it allows plaintiffs to place a legal claim on a defendant s assets early on in the judicial process before a judgment is even entered this form of judicial lien provides a two fold benefit as it protects the plaintiff s right and ability to collect on any future judgment it also provides leverage to negotiate a settlement with the defendant earlier in the process requirements for a writ of attachmentmost jurisdictions at the state and federal level allow plaintiffs to obtain writs of attachment although the agencies and procedures involved may differ typical courts require a claim be to obtain a writ of attachment as with any form of judicial relief you must first file a civil lawsuit before a court has any authority to take action on your behalf this requires filing and serving a complaint for recovery of the debts owed to you or your business after that or simultaneous with these actions you can initiate a proceeding to obtain a writ of attachment usually requiring a hearing before the court | |
what is a writ of execution | a writ of execution is a court order that puts in force a judgment of possession and directs law enforcement personnel to begin the transfer of property as the result of a legal judgment property may include assets money or real property understanding writs of executiona judgment of possession is a type of court order that determines who is entitled to property after a judgment of possession is rendered by the court the judge may then issue a writ of execution to begin the transfer of property the judgment for possession states the plaintiff has a right to the property the writ of execution actually begins the transfer process from a judgment debtor to a plaintiff | |
when a court issues a writ of execution a sheriff deputy sheriff or a court official is usually charged with taking possession of any property that is owed to the plaintiff if the property is money the debtor s bank account may be frozen or the funds may be moved into a holding account if real property is to be transferred the items can be transferred in kind or can be sold in a sheriff s sale funds from the sale may be given to the plaintiff to satisfy the terms of the court s judgment | a nulla bona is the legal term used when a writ of execution results in an effort to collect but no available assets were available to be seized | |
when are writs of execution used | after a judgment of possession a writ of execution is typically only granted if the defendant is required by law to make a payment to a plaintiff but will not do so voluntarily a writ of execution can also be used to evict a tenant who will not leave on their own and who will not pay rent in the event of a tenant s eviction the issuance of a writ of execution allows the tenant and their belongings to be removed from the residence a writ of execution also allows for property to be collected that can then be sold to produce funds for repayment in certain cases the debtor s bank account may be accessed however certain funds may be off limits even with a writ of execution including social security income many states also exempt unemployment insurance ui benefits and money held in an ira a writ of execution may also be issued in a bankruptcy case in bankruptcy cases judges usually direct a writ of execution to a u s marshal rather than a state official such as a sheriff or a court officer bankruptcy cases can only be heard in federal courts at the federal level the u s marshals service is generally the agent for executing writs of execution the u s marshal is then tasked with enforcing and satisfying the judgment for payment of money | |
what is a writ | a writ is a legal document issued by a court that compels a person to do some specific act or deed or else prevents them from doing some act | |
what is a writ of execution used for in the united states today | a writ of execution is a legal document issued by a court directing a sherriff s office or the u s marshal service to enforce and satisfy a judgment for payment of money 1 this may include the seizure of assets | |
what assets are excluded from writs of execution | a few assets are protected from seizure by a writ of execution but which will vary by state law these may include social security payments qualified retirement account assets and unemployment payments other exemptions may include personal apparel home furnishings farm equipment and pets | |
what is a writ of seizure and sale | a writ of seizure and sale is an order issued by a court that allows the petitioner usually a creditor to take ownership of a property from a borrower once the property has been seized by the creditor it can be sold usually at auction writs of seizure and sale are used to take possession of a property when a borrower has failed to make payments on the debt or loan for an extended period of time | |
how does a writ of seizure and sale work | a writ of seizure and sale is a drastic step taken by a lender or creditor to recoup some of the money that was lent to the borrower for the property a writ of seizure and sale can occur when a borrower defaults on a mortgage and as a result the loan goes into foreclosure foreclosure is a legal process by which a bank creditor or lender assumes control of a property and sells the home the assistance of law enforcement is usually employed in seizing the property there are laws governing the foreclosure process and each state s laws might be slightly different in some states a notice is made publicly of the foreclosure and impending sale however banks often try to work with borrowers during a process called pre foreclosure to help bring the loan payments to the current status and explore alternatives to prevent foreclosure and the writ of seizure and sale of the property | |
when do lenders issue a writ of seizure and sale | a writ of seizure and sale can t be obtained by a creditor if the borrower has only a few missed payments instead it s an aggressive move that is made when a borrower has ignored all other attempts at collection and the debt is in default default is the failure to pay back a loan or debt usually a loan is in default when a borrower misses payments or stops making payments if a property is seized and auctioned off to another buyer the borrower no longer owns the property and is evicted from the house following the sale if a creditor can t work out a payment plan with a borrower a writ of seizure is obtained a judgment creditor is entitled as a right without the leave of the court and without notice to the judgment debtor to issue execution however the court has power in certain circumstances to stay such execution if the property is seized and auctioned off to another buyer the borrower no longer owns the property and is evicted from the house following the sale seized properties are often sold at a low price to quickly recoup some of the losses incurred by the lender it s quite possible the bank or lender could take a loss on the property when considering the difference between the original mortgage loan amount and the sale price after foreclosure therefore it s best for both parties if borrowers work out a deal with their lender to avoid foreclosure and a writ of seizure and sale | |
what is a write down | a write down is an accounting term for the reduction in the book value of an asset when its fair market value fmv has fallen below the carrying book value and thus becomes an impaired asset the amount to be written down is the difference between the book value of the asset and the amount of cash that the business can obtain by disposing of it in the most optimal manner a write down is the opposite of a write up and it will become a write off if the entire value of the asset becomes worthless and is eliminated from the account altogether laura porter investopediaunderstanding write downswrite downs can have a huge impact on a company s net income and balance sheet during the 2007 2008 financial crisis the drop in the market value of assets on the balance sheets of financial institutions forced them to raise capital to meet minimum capital obligations accounts that are most likely to be written down are a company s goodwill accounts receivable inventory and long term assets like property plant and equipment pp e pp e may become impaired because it has become obsolete or damaged beyond repair or if property prices have fallen below the historical cost in the service sector a business may write down the value of its stores if they no longer serve their purpose and need to be revamped write downs are common in businesses that produce or sell goods which require a stock of inventory that can become damaged or obsolete for example technology and automobile inventories can lose value rapidly if they go unsold or new updated models replace them in some cases a full inventory write off may be necessary generally accepted accounting principles gaap in the united states have specific standards regarding the fair value measurement of intangible assets gaap requires that goodwill be written down immediately anytime if its value declines for example in november 2012 hewlett packard announced a massive 8 8 billion impairment charge to write down a botched acquisition of u k based autonomy corp plc which represented a huge loss in shareholder value since the company was worth only a fraction of its earlier estimated value 1a write down impacts both the income statement and the balance sheet a loss is reported on the income statement if the write down is related to inventory it may be recorded as a cost of goods sold cogs otherwise it is listed as a separate impairment loss line item on the income statement so that lenders and investors can assess the impact of devalued assets the asset s carrying value on the balance sheet is written down to fair value shareholders equity on the balance sheet is reduced as a result of the impairment loss on the income statement an impairment may also create a deferred tax asset or reduce a deferred tax liability because the write down is not tax deductible until the affected assets are physically sold or disposed of in terms of financial statement ratios a write down to a fixed asset will cause the current and future fixed asset turnover to improve as net sales will now be divided by a smaller fixed asset base because shareholders equity falls debt to equity rises debt to assets will be higher as well with the lower asset base future net income potential rises because the lower asset value reduces future depreciation expenses special considerationsassets are said to be impaired when their net carrying value is greater than the future undiscounted cash flow that these assets can provide or be sold for under gaap impaired assets must be recognized once it is evident that this book value cannot be recovered once impaired the asset can be written down if it remains in use or classified as an asset held for sale that will be disposed of or abandoned 2the disposition decision differs from a typical write down because once a company classifies impaired assets as held for sale or abandoned they are no longer expected to contribute to ongoing operations the book value would need to be written down to the fair market value less any costs to sell the item companies often write down assets in quarters or years when earnings are already disappointing to get all the bad news out at once which is known as taking a bath a big bath is a way of manipulating a company s income statement to make poor results look even worse to make future results look better for example banks often write down or write off loans when the economy goes into recession and they face rising delinquency and default rates on loans by writing off the loans in advance of any losses and creating a loan loss reserve they can report enhanced earnings if the loan loss provisions turn out to be overly pessimistic when the economy recovers | |
how do write downs impact a company | write downs can significantly affect a business s net income and balance sheet write downs are common among companies that produce or sell goods which require a stock of inventory that can become damaged or obsolete | |
which accounts are most likely to have write downs | a business s accounts that are most likely to be written down are its goodwill accounts receivable inventory and long term assets like property plant and equipment pp e | |
where does a write down impact a business | a write down has two impacts on a company on its income statement and its balance sheet the bottom linein accounting a write down is a term for an asset s reduction in book value when its fair market value fmv has fallen below the carrying book value and thus becomes an impaired asset the amount of the write down is the difference between the book value of the asset and the amount of cash that the business can obtain by disposing of it in the most optimal manner | |
what is a write off | a write off is an accounting action that reduces the value of an asset while simultaneously debiting an expense account it is primarily used in its most literal sense by businesses seeking to account for unpaid loan obligations unpaid receivables or losses on stored inventory generally it can also be referred to broadly as something that helps to lower an annual tax bill investopedia joules garciaunderstanding write offsbusinesses regularly use accounting write offs to account for losses on assets related to various circumstances as such on the balance sheet write offs usually involve a debit to an expense account and a credit to the associated asset account each write off scenario will differ but usually expenses will also be reported on the income statement deducting from any revenues already reported generally accepted accounting principles gaap detail the accounting entries required for a write off the two most common business accounting methods for write offs include the direct write off method and the allowance method the entries will usually vary depending on each individual scenario financial institutions use write off accounts when they have exhausted all methods of collection action write offs may be tracked closely with an institution s loan loss reserves which is another type of non cash account that manages expectations for losses on unpaid debts loan loss reserves work as a projection for unpaid debts while write offs are a final action a business may need to take a write off after determining a customer is not going to pay their bill generally on the balance sheet this will involve a debit to an unpaid receivables account as a liability and a credit to accounts receivable there can be several reasons why a company may need to write off some of its inventory inventory can be lost stolen spoiled or obsolete on the balance sheet writing off inventory generally involves an expense debit for the value of unusable inventory and a credit to inventory tax write offsthe term write off may also be used loosely to explain something that reduces taxable income as such deductions credits and expenses overall may be referred to as write offs businesses and individuals have the opportunity to claim certain deductions that reduce their taxable income the internal revenue service allows individuals to claim a standard deduction on their income tax returns individuals can also itemize deductions if they exceed the standard deduction level deductions reduce the adjusted gross income applied to a corresponding tax rate 1tax credits may also be referred to as a type of write off tax credits are applied to taxes owed lowering the overall tax bill directly 2corporations and small businesses have a broad range of expenses that comprehensively reduce the profits required to be taxed an expense write off will usually increase expenses on an income statement which leads to a lower profit and lower taxable income | |
do not confuse a write off with a write down in a write down an asset s value may be impaired but it is not totally eliminated from one s accounting books | write offs vs write downsa write off is an extreme version of a write down where the book value of an asset is reduced below its fair market value for example damaged equipment may be written down to a lower value if it is still partially usable and debt may be written down if the borrower is only able to repay a portion of the loan value the difference between a write off and a write down is a matter of degree where a write down is a partial reduction of an asset s book value a write off indicates that an asset is no longer expected to produce any income this is usually the case if an asset is so impaired that it is no longer productive or useful to the owners | |
what is a tax write off | the internal revenue service irs allows individuals to claim a standard deduction on their income tax return and also itemize deductions if they exceed that level deductions reduce the adjusted gross income applied to a corresponding tax rate 1 tax credits may also be referred to as a type of write off because they are applied to taxes owed lowering the overall tax bill directly the irs allows businesses to write off a broad range of expenses that comprehensively reduce taxable profits 3 | |
how is a business write off done | businesses regularly use accounting write offs to account for losses on assets related to various circumstances as such on the balance sheet write offs usually involve a debit to an expense account and a credit to the associated asset account each write off scenario will differ but usually expenses will also be reported on the income statement deducting from any revenues already reported this leads to a lower profit and lower taxable income | |
how is a business write off accounted for under gaap | generally accepted accounting principles gaap detail the accounting entries required for a write off the two most common business accounting methods for write offs include the direct write off method and the allowance method the entries used will usually vary depending on each individual scenario three of the most common scenarios for business write offs include unpaid bank loans unpaid receivables and losses on stored inventory the bottom lineunderstanding write offs and the difference between a tax write off and a write down can help you reduce taxable income and increase the accuracy of how you record a business financial situation learn about the write offs that apply to your situation and don t miss the chance to take advantage of them when they apply | |
what is a write up | a write up is an increase made to the book value of an asset because its carrying value is less than fair market value a write up generally occurs if a company is being acquired and its assets and liabilities are restated to fair market value under the purchase method of m a accounting it may also occur if the initial value of the asset was not recorded properly or if an earlier write down in its value was too large an asset write up is the opposite of a write down and both are non cash items understanding write upsbecause a write up impacts the balance sheet the financial press does not report on more mundane instances of businesses initiating a write up of asset values in contrast sizable write downs do spark investor interest and make for better news cycles whereas a write down is generally considered a red flag a write up is not considered a positive harbinger of future business prospects since they re generally a one time event during an asset write up special treatment for intangible assets and tax effects are considered with an asset write up the deferred tax liability is generated from additional future depreciation expense example of a write upfor example assume company a is acquiring company b for 100 million at which point the book value of company b s net assets was 60 million before the acquisition can be completed company b s assets and liabilities have to be marked to market to determine their fair market value fmv if the fmv of company b s assets is determined to be 85 million the increase in their book value of 25 million represents a write up the difference of 15 million between the fmv of company b s assets and the purchase price of 100 million is booked as goodwill on company a s balance sheet | |
what is an option writer | a writer sometimes referred to as a grantor is the seller of an option who opens a position to collect a premium payment from the buyer writers can sell call or put options that are covered or uncovered an uncovered position is also referred to as a naked option for example the owner of 100 shares of stock can sell a call option on those shares to collect a premium from the buyer of the option the position is covered because the writer owns the stock that underlies the option and has agreed to sell those shares at the strike price of the contract a covered put option would involve being short the shares and writing a put on them if an option is not covered the option writer theoretically faces the risk of very large losses if the underlying moves against them understanding the writeroption buyers are given the right to buy or sell an underlying security within a certain time frame at a specified price by the option seller or writer for this right the option has a cost called the premium the premium is what option writers are after they get paid upfront but face high risk if uncovered if the option becomes very valuable to the buyer for example a put writer is hoping an underlying stock won t drop below the strike price the buyer is hoping it will the further below the put s strike price the underlying falls the larger the loss for the writer and the bigger the profit for the put buyer an option is uncovered when the writer does not have an offsetting position in the account for example the writer of a put option who agrees to buy shares at the contract s strike price is uncovered if there is not a corresponding short position in their account to offset the risk of buying shares the writer faces potentially large losses if the options they write are uncovered that means they don t own shares they write calls on or don t hold short shares in the options they write puts on the large losses can result from an adverse move in the underlying s price with a call for example the writer is agreeing to sell shares to the buyer at the strike price say 50 but assume that the stock currently trading at 45 is offered a buyout by another company for 70 per share the underlying instantly launch to 65 and oscillates there it doesn t go to 70 because there is a chance the deal won t go through the writer of the option now needs to buy shares at 65 to sell them at 50 to the option buyer if the buyer exercises the option even if the option hasn t expired yet the option writer is still facing a large loss since they will need to buy the option back for roughly 15 more 65 50 than they wrote it for to close out the position the primary objective for option writers is to generate income by collecting premiums when contracts are sold to open a position the largest gains occur when contracts that have been sold expire out of the money for call writers options expire out of the money when the share price closes below the strike price of the contract out of the money puts expire when the price of the underlying shares closes above the strike price in both situations the writer keeps the entire premium received for the sale of the contracts | |
when the option moves in the money the write faces a potential loss because they need to buy the option back for more than they received | covered writing is considered to be a conservative strategy for generating income uncovered or naked option writing is highly speculative because of the potential for unlimited losses call writingsome traders will use a covered call strategy this is especially true with dividend paying stocks dividend shares will see price action or fluctuations often equal to the expected dividend payment as the ex dividend date approaches covered call writing generally results in one of three outcomes when the options expire worthless the writer keeps the entire premium they received for writing the option if the options are going to expire in the money the writer can either let the underlying shares be called away at the strike price or buy the option to close the position called away means they need to sell their actual shares to the option buyer at the strike price and the buyer will purchase the shares from them closing the option position on the other hand means buying the same option to offset the prior sold option this closes the position and the profit or loss is the difference between the premium received and the price paid to buy the option back the outcomes of writing uncovered calls are generally the same with one key difference if the share price closes in the money the writer must either buy stock on the open market to deliver shares to the option buyer or close the position the loss is the difference between the strike price and the open market price of the underlying negative number plus the premium initially received put writing | |
when a put writer is short the underlying stock the position is covered if there is a corresponding number of shares sold short in the account in the event that the short option closes in the money the short position offsets the loss of the written put | in an uncovered position the writer must either buy shares at the strike price or buy the same option to close the position if the writer buys the shares the loss is the difference between the strike price and open market price minus the premium received if the writer closes the position by buying a put option to offset the sold option the loss is the premium paid to buy minus the premium received premium time valueoption writers pay especially close attention to time value the longer an option has until the expiration the greater its time value because there is a greater chance it could move into the money this possibility is of value to option buyers and so they will pay a higher premium for a similar option with a longer expiry than a shorter expiry time value decays as time passes which favors the option writer an out of the money option that trades for 5 has time value because the option has no intrinsic value and yet it still trades for 5 if an option writer sells this option they receive the 5 as time passes as long as that option stays out of the money the value of that option will deteriorate to 0 at expiration this allows the writer to keep the premium because they already received 5 and the option is now worth 0 and worthless once it expires out of the money as an option gets near to expiry the main determinant of its value is the underlying s price relative to the strike price if the option is in the money the option value will reflect the difference between the two prices if the option does expire in the money but the difference between the strike price and the underlying s price is only 3 the option seller still actually makes money because they received 5 and can buy back the position for 3 which is what the option will likely trade at near expiration example of writing a call option on a stockassume that apple inc aapl shares are trading at 210 a trader doesn t believe that the shares will rise above 220 within the next two months so they write a 220 strike price call option for 3 50 this means they receive 350 3 50 x 100 shares they will get to keep that 350 as long as the option expires in two months when the price of apple is below 220 the writer may already own shares of apple or they could buy 100 shares at 210 to create a covered call this protects them in case the stock shoots higher say to 230 if the writer sells the option uncovered and the price rises to 230 then the writer would have to buy shares at 230 to sell to the option buyer at 220 losing the writer 650 10 3 50 x 100 shares but if they owned the shares already they could just give them to the buyer at 220 make 1 000 on the share purchase 10 x 100 shares and still keep the 350 from the option sale the downside of the covered call is that if the share price drops they get to keep the 350 option premium but they now own shares which are falling in value if the shares fall to 190 the writer gets to keep the 3 50 per share from the option but loses 20 per share 2 000 on the shares they purchased at 210 losing 16 50 20 3 50 per share is better than losing the full 20 though which is what they would have lost if they bought the shares but didn t sell the option | |
what is writing an option | writing an option refers to selling an options contract in which a fee or premium is collected by the writer in exchange for the right to buy or sell shares at a future price and date understanding writing an optiontraders write an option by creating a new option contract that sells someone the right to buy or sell a stock at a specific price strike price on a specific date expiration date in other words the writer of the option can be forced to buy or sell a stock at the strike price however for that risk the option writer receives a premium that the buyer of the option pays the premium received when writing an option depends upon several factors including the current price of the stock when the option expires and other factors such as the underlying asset s volatility benefits of writing an optionsome of the main benefits of writing an option include premium received immediately options writers receive a premium as soon as they sell an option contract keep full premium for expired out of the money options if the written option expires out of the money meaning that the stock price closes below the strike price for a call option or above the strike price for a put option the writer keeps the entire premium time decay options decline in value due to time decay which reduces the option writer s risk and liability because the writer sold the option for a higher price and has already received a premium they can buy it back for a lower price flexibility an options writer has the flexibility to close out their open contracts at any time the writer removes their obligation by simply buying back their written option in the open market risk of writing an optioneven though an option writer receives a fee or premium for selling their option contract there s the potential to incur a loss for example let s say david thinks apple inc aapl shares will stay flat until the end of the year due to a lackluster launch of the tech company s iphone 11 so he decides to write a call option with a strike price of 200 that expires on dec 20 unexpectedly apple announces that it plans on delivering a 5g capability iphone sooner than expected and its stock price closes at 275 on the day the option expires david still has to deliver the stock to the option buyer for 200 that means he will lose 75 per share as he has to buy the stock on the open market for 275 to deliver to his options buyer for 200 note that the losses on writing an option are potentially unlimited if the option is written naked that is if there are no other related positions if however somebody writes a covered call where they are already long the stock the losses in the call that are sold will be offset by increases in the value of the shares owned practical example of writing an optionlet s assume the boeing company ba stock is trading at 375 and sarah owns 100 shares she believes the stock will trade flat to slightly lower over the next several months as investors wait for news about a possible new order from a major airline tom on the other hand believes the airline will in fact make the purchase quite a bit sooner than expected causing the stock to spike in the near term because of these opinions sarah decides to write a 375 november call option equal to 100 shares earning a premium of 17 00 at the same time tom places an order to buy a 375 november call for 17 00 consequently sarah and tom s orders transact which results in a 1 700 credit into sarah s bank account and gives tom the right to buy her 100 shares of boeing at 375 at any time before the november expiry date suppose no news is released about when the possible order may occur and so the stock continues to hover around 375 for several weeks as a result the option expires worthless meaning sarah keeps the 1 700 premium paid by tom alternatively assume the airline announces their purchase in the next few days and boeing s stock jumps to 450 in this case tom exercises his option to buy 100 shares of boeing from sarah at 375 although sarah received a 1 700 premium for writing the call option she also lost 7 500 because she had to sell her stock that is worth 450 for 375 | |
what is written down value | written down value is the value of an asset after accounting for depreciation or amortization in short it reflects the present worth of a resource owned by a company from an accounting perspective this value is included on the company s balance sheet in its financial statements written down value is also called book value or net book value | |
how written down value works | in accounting there are various conventions designed to better match sales and expenses to the period in which they are incurred one approach that companies often embrace is referred to as depreciation or amortization companies generally use depreciation for physical assets such as machinery and amortization for intangible assets such as patents and software both methods permit firms to expense resources of economic value over a longer timeframe in other words rather than deduct the full purchase price from net income ni right away companies can stretch the cost of assets over many different periods for example if a company bought a piece of machinery it wouldn t have to expense it in the year that it was bought but can stretch out the cost of the machinery over a number of years until it is sold or disused a period known as its useful life written down value is a method used to determine a previously purchased asset s current worth and is calculated by subtracting accumulated depreciation or amortization from the asset s original value the resulting figure will appear on the company s balance sheet amortization methodsamortization can be used to write down the value of debt or intangible assets and is slightly more complicated than depreciation methods the asset s book value is reduced on the company s books according to a set schedule various methods can be used for amortizing different types of assets intangible assets such as patents are typically written down annually bonds on the other hand often use an effective interest method of amortization meanwhile amortization schedules for outstanding loans normally follow the repayment schedule of the loan with differentiation for interest and principal some additional amortization methods are also available including diminishing balance and ballooning the written down value of an amortized asset is important because it helps the company to keep tabs on them when an asset is amortized to zero it can be taken off the books or may need to be renewed depreciation methodswritten down value can be calculated by a method of depreciation that is sometimes called the diminishing balance method this accounting technique reduces the value of an asset by a set percentage each year various other depreciation techniques also exist in accounting and are used to capitalize the expenses of different types of assets one example is straight line depreciation which deducts the same cost every year based on dividing the difference between the asset s cost and its expected salvage value by the number of years it is expected to be used the written down value of a depreciated asset is important because it is included in the comprehensive value of a company s total assets depreciated assets typically start on the books at their purchased price and are often sold before they are depreciated to zero the depreciated value of an asset is also important in helping to determine the selling price of the asset when selling the asset the book value is used to help determine the minimum value for which it will be sold real assets typically sell for a price range within their book value and the highest fair market value if a gain occurs from the sale of an asset it will be taxable in most cases the taxable gain on a sale is often determined by comparing the sales from the item to its written down value | |
what is written premium | written premium is an accounting term in the insurance industry used to describe the total amount that customers are required to pay for insurance coverage on policies issued by a company during a specific period of time written premiums factor in the amount of premium charged for a policy that has already become effective regardless of what portions have been earned written premiums are the principal source of an insurance company s revenues | |
how written premium works | people pay for insurance coverage to protect themselves against financial loss for example if a policyholder has a car accident and is insured for it the insurance company is obligated to foot the bill in exchange for taking on this risk the company charges its customers premiums premiums for insurance companies are like sales for retailers insurance companies sell as many premiums as possible and then use the money they generate to cover losses and expenses hopefully with enough left to turn a profit written premiums calculate the total amount customers agree to pay for insurance policies sold during the accounting period for example if an insurance company over the course of its fiscal year fy sells 1 000 new contracts that require each customer to pay 1 000 in premiums its written premiums for that period would be 1 million written premium vs earned premiumwritten premiums are different from premiums earned which are the amount of premiums that a company books as earnings for providing insurance against various risks during the year insured policyholders pay premiums in advance so insurers do not immediately consider premiums paid for an insurance contract as profit the insurer can change the status of the premium from unearned to earned only when its full obligation is fulfilled gross premiums vs net premiumswritten premiums may be measured as a gross or net number the gross figure does not factor in deductions from the commission paid to agents who sell the policies legal expenses associated with settlements salaries taxes clerical expenses and reinsurance which is when insurance companies opt to transfer some of their risk to another insurer alternatively written premiums can be measured as net a figure that takes into account associated costs linked to a policy net premiums written represents how much of the premiums the company gets to keep for assuming risk as such looking at changes to net premiums written from year to year is a useful way to gauge the health of insurance companies special considerationswritten premiums are the principal source of an insurance company s revenues and thus appear on the top line of the income statement the insurance industry is cyclical along with the business cycle and competitive with numerous participants fighting for market share primarily on the basis of price | |
what is wrongful dishonor | the term wrongful dishonor refers to a bank s failure to honor a valid negotiable instrument such as a check or draft that has been presented to it for payment if the instrument is valid and there are enough funds to cover it a bank s failure to honor the instrument within the time period stipulated by the uniform commercial code ucc would constitute wrongful dishonor understanding wrongful dishonorthe uniform commercial code is a set of laws and regulations that outline how to conduct business the code was created and adopted to help make it easier for companies to do business across state lines the code contains nine articles that cover things like general provisions letters of credit the sale of goods and services and investment securities the fourth article covers checks drafts and other negotiable instruments under article 4 section 402 of the code a bank wrongfully dishonors a negotiable instrument such as a check or a draft if it refuses payment even though the instrument is properly payable meaning that it has been authorized by the customer and is in accordance with the bank s agreement with that customer a bank may choose to dishonor an instrument due to insufficient funds at any time between the receipt of that instrument and the time that the payer bank returns the instrument or when it gives notice of dishonor only one such determination is necessary however if the bank later decides to reevaluate that decision to dishonor it should use the customer s account balance as it stands at that later time in its reevaluation it s up to the courts to decide whether consequential damages are in fact the result of the wrongful dishonor a payer bank is liable to its customer for damages caused by the wrongful dishonor of an instrument the bank s liability is limited to actual provable damages including any potential consequential damages the damages can include those for actions such as arrest or prosecution of the customer caused by the wrongful dishonor of the instrument in question special considerationsthere are cases when a bank may dishonor a negotiable instrument without violating the terms of the ucc under the rules of the code a bank may dishonor an instrument if honoring it would create an overdraft of the customer s account that is of course unless the bank has a preexisting agreement to honor that customer s overdrafts so if a customer has overdraft protection on their account the bank will generally honor the check or draft example of wrongful dishonora widely studied case of wrongful dishonor is that of loucks v albuquerque national bank the plaintiff loucks owned l m paint and body shop with a partner martinez as a partnership they held a checking account with the defendant bank albuquerque national bank loucks owed the bank an individual debt of 402 but the bank charged that debt to the partnership s checking account even though it knew that it was not a partnership debt the bank began dishonoring multiple checks drafted against the partnership s account because the debit of 402 left the account with insufficient funds the two plaintiffs sued the bank for the 402 plus several thousand in damages they were ultimately awarded only the 402 as the court found that there was no basis for wanton conduct on the part of the defendant bank | |
what is a wrongful termination claim | a wrongful termination claim is filed in a court of law by someone who believes they were unjustly or illegally fired from their job wrongful termination claims involve an alleged violation of federal or state antidiscrimination laws oral and written employment agreements contracts or labor laws including collective bargaining laws or whistleblower laws employees who feel their termination was a form of sexual harassment or in retaliation for having filed a complaint against the employer may also file a wrongful termination claim understanding a wrongful termination claimin the united states employment in most states is considered at will meaning that employers neither need to have a reason to fire a worker nor give advance notice of termination though many do issue formal notices to allow workers to obtain consolidated omnibus benefits reconciliation act cobra health benefits and unemployment insurance benefits still employment at will doesn t mean that businesses can discharge employees completely at their discretion firing people for certain reasons or motives is not permitted especially if it s in violation of state or federal laws or is a breach of contract of some sort individuals who feel their involuntary dismissal represents such a violation can file a wrongful termination claim against their employer a wrongful termination claim is like a lawsuit the employee is bringing an action against their former company and seeking compensation for being unfairly fired if the employee prevails then the compensation for wrongful termination can include monetary damages based on lost wages job hunting costs and other expenses an employee could also ask to have their job restored or be given a comparable position depending on the grounds of the claim see below the employer might also face statutory penalties types of wrongful termination claimsemployees can file wrongful termination claims on several grounds some of the most common include someone fired because of their race color religion sex including pregnancy sexual orientation or gender identity national origin age 40 or older disability and genetic information including family medical history may file a wrongful termination claim 12 these laws fall under the purview of the u s equal employment opportunity commission eeoc on its website the eeoc outlines how to file a charge of employment discrimination 3the u s equal employment opportunity commission eeoc requires you to file a charge of discrimination with the agency before you can file a job discrimination lawsuit against your employer employers cannot legally punish workers for reporting wrongful activities such as criminal activity at work this is known as whistleblower protection 4 also it is not lawful to terminate a worker simply for filing a workers compensation claim although anyone asserting that this has happened will have to prove that the measure was retaliatory and not based on work performance or another permitted reason under the genetic information nondiscrimination act gina employers may not use genetic information in dealing with employees or when making employment decisions including hiring and firing using genetic information includes testing for whether a candidate or employee is at greater risk than average of developing certain diseases or inquiring about family medical history 5while an employer may have grounds to fire an individual for complaining or venting about an employer or boss under the national labor relations act nlra workers are permitted to engage in concerted activity to improve wages or working conditions such as organizing a labor union or conducting a campaign to bring an existing union into their workplace workers need not already be in a union to be covered by this protection 6individuals engaged under a contract that requires a cause for their termination but does not receive one may be eligible to file a wrongful termination claim 7 unlike other types of claims this is a contractual breach rather than a violation of a law or statute the contract must stipulate that the person can be fired only for cause meaning a reason for the dismissal must be noted and it must fall under certain sorts of behavior or action such as willful misconduct deliberate neglect of job duties deliberate sabotage or destruction of company property or divulging company secrets | |
how to file a wrongful termination claim | first it s essential for an employee to read their original agreement letter or employment contract to find out what rights and resources they have available and to check if all conditions and promises were met surrounding their term of employment and their dismissal also they may want to hold off on signing any sort of severance agreement with their employer especially if it specifically demands that they waive any rights to filing a claim or seeking legal redress workers who believe that they have been dismissed unlawfully should consult with an attorney a labor lawyer or an employment law employees rights lawyer for advice on whether they have a claim and for possible representation the sooner the better there are different deadlines for filing claims under state and federal laws if possible individuals should try to obtain a copy of their personnel file to discover who was responsible for their firing who approved it and any documents such as warning letters status reports or performance reviews referring or relating to it such information will be helpful to an attorney reviewing a potential case | |
what is x efficiency | x efficiency refers to the degree of efficiency maintained by firms under conditions of imperfect competition efficiency in this context means a company getting the maximum outputs from its inputs including employee productivity and manufacturing efficiency in a highly competitive market firms are forced to be as efficient as possible to ensure strong profits and continued existence this is not true in situations of imperfect competition such as with a monopoly or duopoly understanding x efficiencyx efficiency points to irrational actions in the market by firms traditional neoclassical economics made the assumption that companies operated in rational ways meaning they maximized production at the lowest possible costs even when the markets were not efficient harvey leibenstein a harvard professor and economist challenged the belief that firms were always rational and called this anomaly x for unknown or x efficiency in the absence of real competition companies are more tolerant of inefficiencies in their operations the concept of x efficiency is used to estimate how much more efficient a company would be in a more competitive environment 1 born in the ukraine harvey leibenstein 1922 1994 was a professor at harvard university whose primary contribution other than x efficiency and its various applications to economic development property rights entrepreneurs and bureaucracy was the critical minimum effort theory that aimed to find a solution to breaking the poverty cycle in underdeveloped countries | |
when calculating x efficiency a data point is usually selected to represent an industry and then it is modeled using regression analysis for example a bank might be judged by total costs divided by total assets to get a single data point for a firm then the data points for all the banks would be compared using regression analysis to identify the most x efficient and where the majority fall this analysis can be done for a specific country to find out how x efficient certain sectors are or across borders for a particular sector to see the regional and jurisdictional variations | history of x efficiencyleibenstein proposed the concept of x efficiency in a 1966 paper titled allocative efficiency vs x efficiency which appeared in the american economic review allocative efficiency is when a company s marginal costs are equal to price and can occur when the competition is very high in that industry prior to 1966 economists believed that firms were efficient with the exception of circumstances of allocative efficiency leibenstein introduced the human element whereby factors could exist attributable to management or workers that don t maximize production or achieve the lowest possible costs in production in the summary section of the paper leibenstein asserted that microeconomic theory focuses on allocative efficiency to the exclusion of other types of efficiencies that are much more significant in many instances furthermore improvement in non allocative efficiency is an important aspect of the process of growth leibenstein concluded that the theory of the firm does not depend on cost minimization rather unit costs are influenced by x efficiency which in turn depends on the degree of competitive pressure as well as other motivational factors in the extreme market structure case monopoly leibenstein observed less worker effort in other words with no competition there is less worker and management desire to maximize production and compete on the other hand when competitive pressures were high workers exerted more effort leibenstein argued that there is much more to gain for a firm and its profit making ways by increasing x efficiency instead of allocative efficiency the theory of x efficiency was controversial when it was introduced because it conflicted with the assumption of utility maximizing behavior a well accepted axiom in economic theory utility is essentially the benefit or satisfaction from a behavior such as consuming a product x efficiency helps to explain why companies might have little motivation to maximize profits in a market where the company is already profitable and faces little threat from competitors before leibenstein companies were believed to always maximize profits in a rational manner unless there was extreme competition x efficiency posited that there could be varying levels of degrees of efficiency that companies might operate firms with little motivation or no competition could lead to x inefficiency meaning they choose not to maximize profits because there s little motivation to achieve maximum utility however some economists argue that the concept of x efficiency is merely the observance of workers utility maximizing tradeoff between effort and leisure empirical evidence for the theory of x efficiency is mixed x efficiency vs x inefficiencyx efficiency and x inefficiency are the same economic concept x efficiency measures how close to optimal efficiency a firm is operating in a given market for example a firm may be 0 85 x efficient meaning it is operating at 85 of its optimal efficiency this would be considered very high in a market with significant government controls and state owned enterprises x inefficiency is the same measurement but the focus is on the gap between current efficiency and potential a state owned enterprise in the same market as the previous company may have an x efficiency ratio of 0 35 meaning it is operating at only 35 of its optimal efficiency in this case the firm may be referred to as x inefficient to draw attention to the large gap even though it is still x efficiency that is being measured | |
what is an x mark signature | an x mark signature is made by a person in lieu of an actual signature due to illiteracy or disability a person may be unable to append a full signature in name to a document as an attestation that its content has been reviewed and approved in order to be legally valid the x mark signature must be witnessed understanding an x mark signaturex mark signatures are so named because historically the person signing the document simply makes a cross hatched mark resembling a letter x rather than their full customary signature the actual form of the x mark may not actually be a letter x and might take some other form of illegible mark meant to authenticate that the person understands and agrees to the stated terms due to the obvious potential for fraud doubts may arise about the validity and enforceability of documents signed with x mark signatures in some states the presiding law can require courts to invalidate wills signed with an x unless the testator was physically or mentally incapable of signing their own full name 1an individual might use an x mark signature if they have been injured in an accident and need to approve a legal document but cannot physically form a full signature for example the testator may need to grant power of attorney to a responsible party while they are being treated in a hospital it is possible for an x mark signature to be used to sign checks commercial contracts and promissory notes even if the signee is not impaired physically or mentally x mark signature requirementsstates may require more than one witness for an x mark signature to be valid an x mark signature may need to be notarized too for the document to be enforceable 2an individual using an x mark signature may also be required to show some proof of their identity at the time the document is signed this stipulation may be enforced regardless of the individual s condition 3witnesses may or may not be required to provide proof of their identities they could be required to provide their addresses and to also type or print their names witnesses may be summoned to court to testify regarding the signing of the document by the testator in the case of a contested will 1legal challenges to x mark signaturesin the event of a legal claim against the document the relationship of each witness to the person signing the document might be called into question for example if the only witnesses to an x mark signature are individuals who stand to benefit from a will being signed concerns for fraud could be raised the mental capacity of the individual signing an x mark signature may lead to legal challenges to the validity of the document if the individual suffers from conditions that may impair their understanding of what they are signing the document may be deemed unenforceable this could occur if the individual suffers from dementia or other ailments that constrain their ability to comprehend the legal effects of the document 1 | |
what is extensible business reporting language | xbrl or extensible business reporting language is a software standard that was developed to improve the way in which financial data is communicated making it easier to compile and share this data notably extensible business reporting language is an implementation of xml extensible markup language which is a specification that is used for organizing and defining data online xbrl uses tags to identify each piece of financial data which then allows it to be used programmatically by an xbrl compatible program xbrl allows for easy transmission of data between businesses understanding extensible business reporting languageimagine that you are looking at a company s financial statements online on the company s website traditionally these statements would simply be in plain text if you wanted to put these numbers into a spreadsheet file to run analysis on the statements you would have to either manually type or copy and paste each account and corresponding number into the spreadsheet however if the data on the site was available in extensible business reporting language xbrl you could simply convert this data from the website into a spreadsheet program usually instantaneously that is xbrl compatible due to the standardized nature of the identification tags and the language itself financial data from one country which has set accounting standards such as u s gaap can be easily compiled into the accepted accounting standards of another country even if they are drastically different the reporting of financial data in xbrl is not required by all companies but because it has become prevalent it has been suggested that it won t be long before all companies will have to report their financial data in this language ixbrl where i stands for inline is an update that allows for xbrl metadata to be embedded in an html document xbrl was developed in 1998 with version 1 0 by the american institute of certified public accountants aicpa the latest version of the standards v2 1 was formalized in the year 2003 while the v2 1 standard has remained stable since then several xbrl modules have been developed that can be plugged in to achieve new functionality or operability | |
what is the xcd eastern caribbean dollar | xcd is the symbol for the eastern caribbean dollar which is the official currency shared by eight caribbean island countries anguilla antigua and barbuda dominica grenada montserrat saint kitts and nevis saint lucia and saint vincent and the grenadines the eastern caribbean dollar is subdivided into 100 cents and has existed since 1965 when it supplanted the british west indies dollar this makes it among the oldest currencies in the region still in use as of september 2022 1 xcd is equal to usd 0 37 understanding the xcd eastern caribbean dollar the eastern caribbean dollar serves as the official currency for the organisation of the eastern caribbean states oecs an economic and monetary union established in 1981 to harmonize economic and trade policies among the 10 islands located in the eastern caribbean only eight of the participating countries use the xcd however martinique remains affiliated with france and therefore uses the euro while the british virgin islands use the u s dollar at its establishment the eastern caribbean dollar replaced the british west indies dollar at par the eastern caribbean currency authority controlled the issuance of the eastern caribbean dollar and pegged its value at 4 8 xcd to 1 gbp in 1976 the currency authority then re pegged the eastern caribbean dollar to the u s dollar at a rate of 2 7 xcd to 1 usd the eastern caribbean bank established in 1983 subsequently took over the issuance of the currency leaving the u s dollar peg in place the eastern caribbean bank s mandate covers regulation of liquidity throughout its member states as well as the promotion of economic and monetary stability through support of economic development and maintenance of a sound financial structure the bank sees its dollar peg as a primary means to maintain price stability throughout the region and keep inflation in check other caribbean currenciesdespite their small size and relative proximity to one another many other caribbean nations use their own currencies barbados which at one time used the eastern caribbean dollar switched to its own dollar in 1973 pegged with the u s dollar at a rate of 2 barbadian dollars bbd to 1 usd elsewhere the trinidad and tobago dollar ttd which is approximately the same age as the eastern caribbean dollar began with a u s dollar peg and eventually moved to a floating rate in 1993 likewise jamaican dollars jmd used on the island of jamaica and issued by the bank of jamaica float against other currencies high inflation has led to a de facto phaseout of lower denomination currencies in the country despite the proliferation of various currencies throughout the caribbean region most tourist destinations accept payment in major global currencies including the u s dollar usd british pound sterling gbp and the euro eu | |
what is xd | xd is a symbol used to signify that a security is trading ex dividend it is an alphabetic qualifier that acts as shorthand to tell investors key information about a specific security in a stock quote sometimes x alone is used to indicate that the stock is trading ex dividend qualifiers can vary depending on where the stock is quoted because the various news and market data services that provide stock quotes may use different qualifiers these symbol letters may occur as part of a display on a broker s trading platform on a charting program or in a timely published report understanding xda dividend is a distribution of part of a company s earnings to the company s shareholders when a stock is trading ex dividend the current stockholder has received a recent dividend payment and whoever purchases the stock will not receive the dividend the stock s price is likely to be lower as a result there are quite a few qualifiers that relate to dividends for example j as a suffix indicates that the stock paid a dividend earlier in the year but currently does not carry a dividend comparing xd with the record dateyou ll need to look at two important dates to determine who should get a dividend the ex date or xd and the record date an investor must be on the company s books as a shareholder to receive a dividend once the company sets the record date the ex dividend date is set the ex dividend date for stocks is usually set one business day before the record date an investor who purchased shares before the ex dividend date will get the upcoming dividend if a purchase took place on or after the ex dividend date then the seller gets the dividend companies also use the record date to determine to whom to send financial reports proxy statements and other required information special rules for determining xdif a dividend is 25 or more of the stock s value then special rules will apply to determine the ex dividend date when this happens the ex dividend date is deferred until one business day after the dividend is paid sometimes a company pays a dividend in the form of stock rather than cash either as additional shares in the company or in a subsidiary that is being spun off setting the ex date for stock dividends may be different from cash dividends it will be set the first business day after the stock dividend is paid and is also after the record date selling before the ex dividend date includes an obligation to deliver any shares acquired as a result of the dividend to the buyer of your shares since the seller only receives an i o u from their broker for the additional shares according to the securities and exchange commission sec the day you can sell your shares without being obligated to deliver the additional shares is not the first business day after the record date but usually is the first business day after the stock dividend is paid | |
what is a xenocurrency | the term xenocurrency refers to any currency that is traded in markets outside of its domestic borders its name derives from the greek prefix xeno meaning foreign today the use of the term xenocurrency is infrequent as the prefix xeno can have negative connotations in modern english xenophobia for example means an irrational fear of or hatred toward foreigners foreign currency therefore has become the preferred term for referring to non domestic currencies | |
how xenocurrencies work | the term xenocurrency was developed in 1974 by the austrian american economist fritz machlup who served as president of the international economic association from 1971 to 1974 12 machlup used the phrase to refer to deposits and loans denominated in currencies other than that of the bank s home country xenocurrency investments can be risky since they are complicated by many factors including currency fluctuations and conversion risks risks come when deposits are in a rising domestic currency market where the foreign investment may result in lower returns when converting the funds back into the home currency however the opposite is valid for investments in declining domestic currency collectively these risks are known as foreign currency effects political risks can also be a factor during a crisis a country s government might place restrictions on the amount of xenocurrency that travelers may take out of the country for instance after the u s withdrew from the iran nuclear deal in may 2018 3 the iranian rial plunged to a record low against the u s dollar 4real world example of a xenocurrencyexamples of xenocurrencies include the indian rupee inr traded in the united states or the japanese yen jpy deposited into a european bank the u s dollar usd is likewise often used as xenocurrency in mexico especially for large transactions in real estate and other business activities today the term xenocurrency is frequently used synonymously with euro currency similarly the phrase xeno market is often used interchangeably with the term eurocurrency market eurocurrency market refers to a money market that trades in xenocurrency banks multinational corporations mutual funds and hedge funds use the eurocurrency market these entities use the market because they wish to circumvent regulatory requirements tax laws and interest rate caps often present in domestic banking particularly in the united states investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment investors investing involves risk including the possible loss of principal | |
what is xetra | the term xetra refers to an electronic german stock exchange based in frankfurt the system is owned and operated by the deutsche b rse group launched in 1997 the trading platform offers electronic trading in stocks funds bonds warrants and commodities contracts the majority of trades executed in germany go through xetra in addition to about one third of continental europe s trading in exchange traded funds etfs investors who use xetra can take advantage of the low costs high transparency and quick execution times whenever they make trades understanding xetraas mentioned above xetra is a fully electronic trading platform headquartered in frankfurt germany the exchange is operated by deutsche b rse group which also owns the frankfurt stock exchange fra or frankfurter wertpapierb rse 1 deutsche b rse group is a diversified organization with a range of products and services that span the financial industry s value chain this includes listing trading clearing and settlement along with custody services liquidity management and more xetra launched in 1997 and was one of the first global electronic trading systems and has grown to account for the majority of all stock trades on the fra in fact more than 90 of all share trading in germany takes place through xetra this is on top of about 30 of all etf trading that takes place in continental europe 2the xetra platform offers increased flexibility for seeing order depth within the markets and because it is a completely electronic platform it offers investors a trading platform with low costs and high transparency as well as fast turnaround times for their orders this is especially true for shares that are highly traded including those that are on the dax this index represents 40 of the biggest and most liquid german companies that trade on the fra 1trading on the xetra electronic platform takes place monday to friday between 9 a m to 5 30 p m local time there is no trading activity on major holidays the platform hosts an opening auction daily at 8 50 a m and a closing auction at 5 30 p m 3the number of trading participants on xetra about half of which are based in germany as of july 2022 4xetra vs other electronic trading systemsxetra may be one of the largest electronic trading systems in the world but it certainly isn t the only one and wasn t the first to offer the ease of automated trading the first automated system for direct trading among u s institutions was launched in 1969 and was called instinet originally named institutional networks 5 nasdaq followed with its own automated system in 1971 6 trade orders were made on these and other similar systems over the phone the new york stock exchange nyse launched its designated order turnaround dot system which allowed brokers to route orders directly to specialists on the floor in 1984 superdot emerged which effectively expanded the number of shares sent to the floor at one time to nearly 100 000 nasdaq soon offered the small order execution system soes to compete with nyse electronic trading is fairly common in today s financial industry it dominates the public markets over physical trading activity thanks to the rise of internet technology in fact very few exchanges offer trading on a physical trading floor instead the majority of trading takes place globally on electronic platforms like xetra but there are risks notably greater cybersecurity threats while individuals remain at some level of cyber attack risk larger entities such as businesses and government systems are often the main targets of cybersecurity attacks the u s department of homeland security uses high tech cybersecurity measures to protect sensitive government information from other countries nation states and individual hackers any financial system that stores credit card information from its users is at high risk along with systems like exchanges | |
what is xrt | xrt is an extension printed after the ticker symbol for a stock it indicates that the stock is trading on an ex rights basis xrt is an abbreviation for the word ex rights ex rights means that the buyer of the stock does not have the rights to purchase more shares at a lower price anymore because those rights have expired xrt is printed on the ticker tape or displayed on the electronic ticker for clarity and to avoid disputes or confusion about where the rights currently remain xrt is also the ticker symbol for the spdr s p retail exchange traded fund etf this is an index fund that tracks a broad based equal weighted index of u s retail industry stocks understanding xrtxrt is a symbol added as an extension to the ticker symbol for a stock that is trading ex rights on the ticker the extension is added after a dot and after the ticker symbol for example a trade of stock apex borax company with the ticker symbol abc that is ex rights would display as abc xrt on the ticker rights are a type of financial instrument that give the purchaser of a stock the right to purchase more shares at a lower price than the trading price for the first month or two after the initial purchase it is said that rights are attached to a stock although in some cases these rights are detachable after that specified initial time period in which the rights are attached those rights expire at this time the stock is said to be traded ex rights when a stock hits the rights expiration period and goes ex rights it usually trades for lower than it has been for a brief period of time because the beneficial rights are no longer attached to it the function of rightsthe function of attaching rights to a stock through a rights offering is to facilitate buyers maintaining their position in the stock if the stock issues more shares not long after the buyer purchases it functions similarly to the way a price guarantee does for the purchase of a retail product in which the purchaser does not need to worry that the price of a product will skyrocket because the price is guaranteed for a certain period of time this is the reason the price of the stock goes down when the rights expire because there is no longer a guarantee that the purchaser can maintain an ownership percentage at the same price this makes the stock less valuable to the purchaser investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment investors investing involves risk including the possible loss of principal |
Subsets and Splits