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September 08th 2010.

Financial Glossary

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H  ( 16 DEFINITIONS )

Half-year rule
For each capital asset class the half-year rule requires that in the year of acquisition of a capital asset, the CCA on that asset may be claimed on only 50 percent of the net additions during the year.    top

Haphazard selection
Haphazard selection is any unsystematic way of selecting sample units.    top

Harmonization
Harmonization is the process of making accounting and auditing standards coordinated, if not uniform, throughout the world.    top

Hedge
A hedge is a protective measure. A hedge is a transaction that involves entering into a transaction intended to offset risk assumed in another transaction. It is arranging for the matching of amounts and timing of sources and uses of cash, interest rates, foreign currency transactions.   top

Hedging
Hedging is trading in financial markets with the goal of reducing the risk inherent in regular business transactions.    top

High-low method
The high-low method is a method of separating a mixed cost into its fixed and variable elements by analyzing the change in cost between the high and low levels of activity.    top

Historical cost convention
Historical cost convention is when all economic transactions are recorded using the cost (historical cost) of the transaction.   top

Home purchase loan
A home purchase loan is a loan received to acquire a home, or to repay debt incurred to acquire a home, by an employee or a person related to the employee. If the employer loans the money without any charge for interest or at a low interest rate a taxable benefit arises. The taxable benefit is equal to the amount of the principal outstanding times the quarterly determined prescribed rate of interest, less interest paid during the year or within 30 days of the year end. The benefit cannot exceed the amount of interest prescribed at the time the loan is taken out. Furthermore, if the prescribed rate is lowered after the loan is acquired, the taxable benefit is reduced.   top

Horizon problem
The horizon problem deals with aligning short-term goals with short-term contracts or activities and long-term goals with long-term contracts or activities. The problem is that often people are compensated based on short-term results that can have long-term material affects.    top

Horizontal analysis
Horizontal analysis is the study of changes of financial statement numbers and ratios across two or more years.   top

Horizontal equity
Horizontal equity means the equal treatment of people in similar positions.   top

Hung convertible
A hung convertible is a convertible bond that cannot be forced to convert if the stock price is below the conversion price.   top

Hurdle rate
The hurdle rate is the minimum acceptable rate of return on an investment.   top

Hybrid financial instrument
A hybrid financial instrument is a financial instrument that bears characteristics of both debt and equity. For example, issues of notes payable with participation in earnings or shares issued with a fixed maturity date and price.    top

Hypothesis testing
Hypothesis testing involves auditors hypothesizing that an account balance is materially accurate as to existence, ownership,and valuation and then testing the hypothesis with sample-based evidence.   top

Hypothetical assumption
A hypothetical assumption is an expression of a condition and course of action the issuer of a financial projection expects could take place.   top