Accounting Terminology Guide

V

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Valuation

The process of determining the PRESENT VALUE of a BOND based on the current MARKET INTEREST RATE.

Valuation Allowance

Method of lowering or raising an object's CURRENT VALUE by adjusting its acquisition cost to reflect its market value by use of a CONTRA ACCOUNT.

Value

How much money something is worth.

Value-Added Tax (VAT)

Consumption TAX levied on the VALUE added to a product at each stage of its manufacturing cycle as well as at the time of purchase by the ultimate consumer

Variable Annuity

Life insurance ANNUITY CONTRACT whose VALUE fluctuates with that of an underlying securities PORTFOLIO or other INDEXof performance.

Variable Costs

Total costs that change in direct proportion to changes in productive output or any other measure of volume.

Variable Manufacturing Costs

Costs that increase or decrease in direct proportion to the number of units produced.

Variable Overhead

The portion of mixed or semi-variable overhead costs that changes proportionately with some measure of activity or output.

Variable Rate Loan

Loan whose interest rate changes over its life in relation to the level of an index.

Variance

Deviation or difference between an estimated value and the actual value.

VAT

Consumption TAX levied on the VALUE added to a product at each stage of its manufacturing cycle as well as at the time of purchase by the ultimate consumer.

Velocity

Rate of spending, or turnover of money- in other words, how many times a dollar is spent in a given period of time.

Vendor

Supplier of goods or services of a commercial nature; may be a manufacturer, importer, or wholesale distributor.

Venture Capital

Investment company whose primary objective is capital growth. New ASSETS invested largely in companies that are developing new ideas, products, or processes.

Vertical Analysis

A technique for analyzing FINANCIAL STATEMENTS that uses percentages to show the relationships of each stated item to the total, which is 100 percent of the figure in a single statement.

Vesting

Point at which certain benefits available to an employee are no longer contingent on the employee continuing to work for the employer.

Voidable

CONTRACT that can be annulled by either party after it is signed because FRAUD, incompetence, or another illegality exists or because a right of rescission applies.

Volatile

Tending to rapid and extreme fluctuations.

Volatility

Characteristic of a SECURITY, commodity, or MARKET to rise or fall sharply in price within a SHORT-TERMperiod.

Volume

Total number of stock shares, bonds, or COMMODITIES futures contracts traded in a particular period.