COLLATERALIZED MORTGAGE OBLIGATION (CMO) or, since 1986, as a Real Estate Mortgage Investment Conduit (REMIC). CMOs and REMICs (terms which are often used interchangeably) are similar types of securities which allow cash flows to be directed so that different classes of securities with different maturities and coupons can be created. They may be collateralized by mortgage loans as well as securitized pools of loans.
INVENTORY SHRINKAGE is a reduction in the physical amount of inventory that is not easily explainable. The most common cause of shrinkage is theft.
MONETARY UNIT ASSUMPTION assumes that values can be relevantly measured in current monetary units. It is not necessary that the currency be stable or that inflation effects be negligible. The discount rate (cost of capital) automatically takes into account expected inflationary effect on dollar or inventory values for the specific entity. This supports economic valuation and enhances comparability.
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