LETTER OF GUARANTEE Definition

Bookmark and Share

LETTER OF GUARANTEE is a written promise issued by a bank to compensate (pay a sum of money) to the beneficiary (third party, local or foreign) in the event that the obligor (customer) fails to honor its obligations in accordance with the terms and conditions of the guarantee/agreement/contract.

Learn new Accounting Terms

AVOIDABLE COST is the amount of expense that would not occur if a particular decision were to be implemented (e.g., if an employee is laid off at a company that is self-insured for unemployment compensation, the avoidable cost is total direct salary less payments for unemployment benefits plus savings in employee benefits).

DERIVATIVE LIABILITIES are financial instruments under contracts that have one or more underlying and one or more notional amounts. See DERIVATIVE.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.