UNDERWATER Definition

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UNDERWATER, in securities, is securities held in a portfolio with an unrealized market loss. Selling them would mean real­izing the loss and, according to statutory accounting, a reduction in policyholders' surplus.

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CASH BASIS OF ACCOUNTING is the accounting basis in which revenue and expenses are recorded in the period they are actually received or expended in cash. Use of the cash basis generally is not considered to be in conformity with generally accepted accounting principles (GAAP) and is therefore used only in selected situations, such as for very small businesses and (when permitted) for income tax reporting. See also Accrual Basis.

AUDITOR is an accountant usually certified by a national professional association of accountants, if one exists in the corporation's country, or certified by another countrys recognized national association of accountants. Corporations will often work with both internal auditors and external auditors.

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