COMPENSATING BALANCES Definition

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COMPENSATING BALANCES are the funds a business might be required to keep in a deposit or reserve account to help offset what the bank perceives as risk. The lender might require that an amount based on the business' average account balance or a certain percentage of the face value of the loan be maintained in a deposit account.

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Dr is an ancient Italian abbreviation for the Italian word 'debare'; meaning 'debit' (not to be confused with the acronym DR with both letters in uppercase).

NZIRFS is New Zealand International Financial Reporting Standards.

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