FINANCIAL REPORTING FRAMEWORK Definition

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FINANCIAL REPORTING FRAMEWORK is a set of criteria used to determine measurement, recognition, presentation, and disclosure of all material items appearing in the financial statements.

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RISK ADJUSTED RETURN is when we subtract from the rate of return on an asset a rate of return from another asset that has similar risk. This gives an abnormal rate of return that shows how the asset performed over and above a benchmark asset with the same risk. We can also use the beta against the benchmark to calculate an alpha which is also risk adjusted performance.

INCORPORATION is a legal process through which a company receives a charter and the state in which it is based allows it to operate as a corporation.

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