transferring funds and property titles so that a taxpayer can qualify for a tax-deferred (Code Section 1031) exchange.
factor: To sell accounts receivable at a discount before they are due.
fair market value: The current value of an asset, e.g., the amount at which an asset could be sold or purchased in an
arm's-length transaction.
Fannie Mae (FNMA): Federal National Mortgage Association. As with the Freddie Mac program, FNMA packages
individual mortgages into loan packages attractive to investors. The sale of mortgage packages to investors makes more
mortgage money available. As with Freddie Mac, earnings on Fannie Mae securities are fully taxable.
FASB (Financial Accounting Standards Board): The private organization responsible for establishing the standards
for financial accounting and reporting in the United States.
FCPA (Foreign Corrupt Practices Act): Legislation requiring any company that has publicly-traded stock to maintain
records that accurately and fairly represent the company's transactions; additionally, requires any publicly-traded
company to have an adequate system of internal accounting controls.
federal employer identification number (FEIN & EIN) Form SS-4: EINs are used to identify the federal tax accounts
of businesses. You need to obtain an EIN if you have employees or operate your business as a partnership or
corporation. An EIN is also needed if you have a Keogh retirement plan or file certain tax returns. Form SS-4, "Application
for Employer Identification Number," is used to request an EIN.
Federal Land Bank: Part of the Federal Farm Credit System. The Federal Land Bank provides long-term loans to
farmers and ranchers for agricultural purposes. They provide mortgage loans and lines of credit as well as loans for
other business purposes, such as buying equipment.
Federal Reserve: The Federal Reserve, the central bank of the United States, was founded by Congress in 1913. Their
duties fall into four general areas: (1) conducting the nation's monetary policy, (2) supervising and regulating banking
institutions and protecting the credit rights of consumers, (3) maintaining the stability of the financial system, and (4)
providing certain financial services to the U.S. government, the public, financial institutions, and foreign official institutions.
Federal Trade Commission (FTC): A federal agency established in 1914. It oversees unfair trade practices, such as
false advertising and business practices that lead to monopoly and other unfair business competition.
fee simple: A term describing the complete right to real estate. The owner can dispose of the property during his or her
lifetime or at death.
FDIC (Federal Deposit Insurance Corporation): Most banks are FDIC-insured. But even if your bank has FDIC
insurance, all of your funds in that bank may not be insured. Unlike traditional deposit products, non-deposit investment
products are not insured. Examples of uninsured investment products include stocks, bonds, annuities, mutual funds,
government securities, and U.S. Treasury securities. Check with your bank to learn what is insured and what is not.
FICA (social security) taxes: Federal Insurance Contributions Act taxes imposed on employee and employer; used
mainly to provide retirement benefits.
fidelity bond: An insurance policy purchased by a company to protect against losses from dishonest employees. It can
cover the theft of money or other company assets.
fiduciary (fiduciary relationship): A person or company entrusted with the custody or overseeing of the property of
someone else. A trustee has a fiduciary relationship with the beneficiaries of that trust.
FIFO (first-in, first-out): An inventory cost flow whereby the first goods purchased are assumed to be the first goods
sold so that the ending inventory consists of the most recently purchased goods.
financial accounting: The area of accounting concerned with reporting financial information to interested external
parties.
Financial Accounting Standards Board (FASB): The private organization responsible for establishing the standards
for financial accounting and reporting in the United States.
financial statements: Reports such as the balance sheet, income statement, and statement of cash flows, which
summarize the financial status and results of operations of a business entity.
financing activities: Transactions and events whereby resources are obtained from, or repaid to, owners (equity
financing) and creditors (debt financing).
First in, first out: See FIFO.
fiscal year: An entity's reporting year, covering a 12 month accounting period.
fixed asset: Tangible assets such as furniture and fixtures, equipment, land, and buildings reflected on the books of a
company at cost (cost less depreciation).
fixed-rated mortgage: A mortgage on which the interest rate stays the same for the entire life of the loan despite what
is happening to the going interest rate for new mortgages.
flat tax: A flat tax system of taxing income means that all taxpayers would pay the same percentage of tax regardless of
their level of income.
float: The time delay between when a check is written and when it clears the bank. Used by some to create an
interest-free loan by writing a check now and making the deposit later to cover the amount of the check before it hits the
bank.
floor: The minimum market amount at which inventory can be carried on the books; equal to net realizable value minus a
normal profit.
FOB (free-on-board) destination: A business term meaning that the seller of merchandise bears the shipping costs
and maintains ownership until the merchandise is delivered to the buyer.
FOB (free-on-board) shipping point: A business term meaning that the buyer of merchandise bears the shipping
costs and acquires ownership at the point of shipment.
Foreign Corrupt Practices Act (FCPA): Legislation requiring any company that has publicly-traded stock to maintain
records that accurately and fairly represent the company's transactions; additionally, requires any publicly-traded
company to have an adequate system of internal accounting controls.
Form 1099: The IRS uses Form 1099 to track payments from a trade or business to others. If your trade or business
pays certain amounts to others (other than wages reportable on Form W-2), you may be required to provide a Form 1099
to the recipient and a copy to the IRS. The IRS will use their copy to determine if the person who received the payments
reported them on his or her income tax return. There are several forms in the 1099 series, each designated by a suffix,
such as Form 1099-Misc for miscellaneous income , or Form 1099-R for retirement plan distributions, etc.
franchise: An entity that has been licensed to sell the product of a manufacturer or to offer a particular service in a
given area.
freight-in: An account used with the periodic inventory method for recording the costs of transporting into a firm all
purchased merchandise intended for sale; added to purchases in calculating cost of goods sold.
functional currency: The currency in which a subsidiary conducts most of its business; generally, but not always, the
currency of the country where it does most of its spending and earning.
