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September 08th 2010.

Financial Glossary

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P  ( 23 DEFINITIONS )

Paid-in capital
Paid-in capital is another name for contributed capital. Paid-in capital is the category of shareholders' equity created by the shareholders' investments.    top

Paid-up capital (PUC)
The paid-up capital (PUC) of a share generally refers to the amount contributed to the corporation when the share was issued. It is determined by the class of the shares and is equal to the average PUC of the class to which the share belongs.    top

Paper trail
A paper trail is a set of telltale signs of erroneous accounting, missing or altered documents, or a dangling debit. (The false or erroneous debit that results from an overstatement of assets.)    top

Par value
Par value is the stated monetary face value of a security.    top

Par value shares
Par value shares are common or preferred shares that endorse a face value as indicated in the articles of incorporation and on the share certificate. Shares issued below par value are issued at a discount. Shares issued above par value are issued at a premium. Discounts and premiums are kept in separate accounts.    top

Parallel processing
Parallel processing is a method of arranging processing departments in which, after a certain point, the units are split to go through different processing departments. Up to the split-off point the processing is parallel.   top

Parallel simulation
Parallel simulation is the reprocessing of live data to test program controls.   top

Parent company
A parent company is a corporation that owns a controlling interest in another corporation (more than 50% of the voting stock is required).   top

Pareto optimal allocation
The Pareto optimal allocation is the point where no one can be made better off without making someone else worse off.   top

Parity check
A parity check is an electronic function that ensures the coding of data internal to the computer does not change when it is moved from one internal storage location to another.   top

Part I tax
Part I of the ITA determines the income tax liability for individuals and corporations. The divisions within Part I of the ITA clearly reflect the four concerns that must be addressed by a tax system. They are: who is liable for Part I tax; what is Part I tax levied on; what is the method for computing Part I tax; and what are the procedures of payment compliance and dispute resolution.   top

Part XIII tax
Part XIII tax is tax withheld at source at a rate of 25 percent when passive income, such as interest, dividends, rents, royalties, management or administration fees, estate or trust income, pension benefits, RRSPs, and retiring allowances, is received by a non-resident from a Canadian resident. Note that Tax Conventions often stipulate the agreed upon rate of tax withheld and this rate overrides the 25 percent rate found in Part XIII. Also, they usually stipulate that Canadian tax paid by a non-resident can be claimed in the taxpayer's country of residence as a foreign tax credit so as to avoid or limit double taxation.   top

Partial method of inter-period tax allocation
The partial method of inter-period tax allocation is a group of alternatives whereby inter-period allocation is applied to some types of temporary differences but not all. For example one method of partial inter-period tax allocation is to allocate only those which are "more likely than not" to reverse.   top

Participating preferred shares
Participating preferred shares allow preferred shareholders to participate in dividends over the stated preferential dividend rate on a pro rata basis with common shareholders. They may be partially participating or fully participating.   top

Partnership
A partnership is a business that is owned by two or more people and that is not organized as a corporation. The partners generally face unlimited liability.    top

Partnership contract
A partnership contract is the agreement between partners that sets forth the terms under which the affairs of the partnership will be conducted.    top

Partnership liquidation
A partnership liquidation is the winding up of a partnership business by converting its assets to cash and distributing the cash to the proper parties.   top

Passenger vehicle
Passenger vehicle means an automobile acquired after June 17, 1987, and an automobile leased under a lease entered into, extended, or renewed after June 17, 1987.   top

Passive investment
A passive investment is an inter-corporate investment in which the investor cannot significantly influence or control the operations of the investee company.   top

Past service cost
Past service cost is the actuarial present value of pension benefits given in a newly introduced pension plan for the work already rendered by current employees.    top

Patent
A patent is an exclusive right granted by the federal government to manufacture and sell a patented machine or device, or to use a process, for 17 years. Patents would normally be amortized over the life of the patent. However, when the useful life of the patent is less than the legal life, the amortization should be calculated over the shorter term.    top

Pay-as-you-go approach to recording post-retirement benefits
Pay-as-you-go approach to recording post-retirement benefits is a method of recording the cost of post-retirement benefits whereby the expense is recognized as amounts are paid during the retirement period. This method is not acceptable under GAAP.   top

Payee
A payee is a note holder. The lender who will receive the principal repayment at maturity is considered the payee.    top