SINKING FUND Definition

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SINKING FUND is a sum set apart periodically from the income of a government or a business and allowed to accumulate in order ultimately to pay off a debt. A preferred investment for a sinking fund is the purchase of the governments or firms bonds that are to be paid off. Usually the fund is administered by a trustee.

Learn new Accounting Terms

INCOME APPROACH is a general way of determining a value indication of a business, business ownership interest, security, or intangible asset using one or more methods that convert anticipated benefits into a present single amount.

EQUITY METHOD is a method of accounting for investments in associated companies.

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