CAPITALIZATION FACTOR Definition

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CAPITALIZATION FACTOR is any multiple or divisor used to convert anticipated benefits into value.

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DEFERRED TAX ASSETS have an effect of decreasing future income tax payments, which indicates that they are prepaid income taxes and meet definition of assets. Whereas deferred tax liabilities have an effect of increasing future years income tax payments, which indicates that they are accrued income taxes and meet definition of liabilities.

CONTRACT RATE OF INTEREST is the interest rate specified in a contract.

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