LCM RULE Definition

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LCM RULE is an abbreviation for lower-of-cost-or-market rule. LCM requires that an asset be reported on the financial statements at the lower of purchase cost or market value.

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DIVIDEND RECEIVED DEDUCTION is the reduction of dividend income from the taxable income of the investing corporation, as provided in section 301 of the Internal Revenue Code. Currently, 70% of dividends received from nonaffiliated corporations may be excluded from taxable income.

BLACK HOLE EXPENDITURE is a capital R&D expenditure that does not give rise to a depreciable asset and is not otherwise deductible.

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