AT RISK Definition

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AT RISK is the exposure to the danger of economic loss; frequently used in the context of claiming tax deductions. For example, a person can claim a tax deduction in a limited partnership if the taxpayer can show it is at risk of never realizing a profit and of losing its initial investment.

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WORKING CAPITAL (WC) is current assets minus current liabilities; also called net current assets or current capital. It measures the margin of protection for current creditors. It reflects the ability to finance current operations.

COMPENSATING ERROR is the name given to the situation where one mistake cancels out the effect of a second mistake.

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