AGGREGATE THEORY Definition

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AGGREGATE THEORY is a theory of partnership taxation in which a partnership is considered as an aggregate of individual co-owners who have bound themselves together with the intention of sharing gains and loses; under this theory, the partnership itself has no existence separate and apart from its members.

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BREAK-EVEN EQUATION is the equation that determines BREAK-EVEN POINT. Let p = unit selling price, v = unit variable cost, FC = total fixed costs, x = sales in units. The equation: px = vx + FC.

SPLIT ACCOUNTING, under IAS 39, provides that if certain conditions are met the 'embedded derivative' in a 'hybrid (combined) financial instrument' (i.e, a financial instrument which includes a non-derivative 'host contract' as well as an embedded derivative) must be accounted for separately from the 'host contract'.

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