Lease Definition

What is meant by the term “lease”? A lease is a contractual agreement between the lessor (the owner of the property) and the lessee (the user of the property) that gives the lessee the right to use the lessor’s property for a specific period of time in exchange for stipulated cash payments.

Lower of Cost or Market (LCM) Theory

What is meant by Lower of cost or market? Lower of cost or market is a method of inventory pricing by which the inventory is priced at cost or market, whichever is lower. It is an application of conservatism in accounting. Explanation Under generally accepted accounting principles (GAAP), the presumption is that inventories will be …

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Long-term Investments Definition

What is meant by the accounting term “Long-term Investments”? Long-term InvestmentsĀ are those assets that include holdings in securities (stocks and bonds) not classified as current, and in some circumstances, investments in certain subsidiaries that have not been consolidated with parent firm.