ALTERNATIVE MINIMUM TAX Definition

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ALTERNATIVE MINIMUM TAX (AMT) is an alternative tax which includes certain tax preference items that are added back into adjusted gross income. If higher than the regular tax, then the regular tax plus the amount by which AMT exceeds the regular tax is paid.

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OPERATIONAL GEARING is the higher the proportion of fixed costs relative to variable operating costs, the higher the operational gearing. This results in greater business risk. A retailer has high fixed costs relative to variable costs, so has a lot of business risk. See GEARING and FINANCIAL GEARING.

RRA is Reserve Recognition Accounting.

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