ACCOUNTING EQUATION Definition

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ACCOUNTING EQUATION is a mathematical expression used to describe the relationship between the assets, liabilities and owners equity of the business model. The basic accounting equation states that assets equal liabilities and owners equity, but can be modified by operations applied to both sides of the equation, e.g., assets minus liabilities equal owners equity.

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UNDERWATER, in securities, is securities held in a portfolio with an unrealized market loss. Selling them would mean real­izing the loss and, according to statutory accounting, a reduction in policyholders' surplus.

BUDGET CONTROL is actions carried out according to a budget plan. Through the use of a budget as a standard, an organization ensures that managers are implementing its plans and objectives. Their actual performance is measured against budgeted performance.

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