Glossary

accelerate To demand immediate repayment of debt in default, exercising thereby a right specified in the loan contract.Accounting Principles Board (APB) Formerly, a rule-making body of the American Institute of Certified Public Accountants.Predecessor of the Financial Accounting Standards Board (see).accrual accounting An accounting system in which revenue is recognized during the period in which it is earned and expenses are recognized during the period in which they are incurred, whether or not cash is received or disbursed.adjusted funds from operations (AFFO) A measure of cash flow from operations for real estate investment trusts (REITs) considered more indicative than funds from operations (see).It is defined as funds from operations plus rent increases minus capital expenditures minus routine maintenance amounts. APB Accounting Principles Board (see).bona fide profit A reported profit that represents a genuine increase in wealth as opposed to one that exploits a flaw in the accounting system and reflects no economic gain.book-to-market ratio A stock valuation measure calculated by dividing a company's total book value (total assets minus total liabilities) by its market value (share price times number of shares outstanding).Proponents of value investing (see) perceive bargains in stocks of companies with book-to-market ratios greater than one. book valueThe amount at which an asset is carried on the balance sheet.Book value consists of the asset's construction or acquisition cost, less depreciation (see) and subsequent impairment of value, if applicable.An asset's book value does not rise as a function of an increase in its market value or inflation.(See also historical cost accounting.)breakeven rate The production volume at which contribution (see) is equivalent to fixed costs (see), resulting in a pretax profit of zero.