ACCOUNTING CONCEPTS Definition

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ACCOUNTING CONCEPTS are the assumptions underlying the preparation of financial statements, i.e., the basic assumptions of going concern, accruals, consistency and prudence.

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VESTED refers to having an absolute right or title, when previously the holder of the right or title only had an expectation. Example: after 20 years of employment Larry Loyals pension rights are now vested.

MARKET ANAMOLY is a persistent and systematic differential of returns that cannot be accounted for by systematic risk factors, i.e. it is an inexplicable price distortion on a market.

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