Sunday 28 July 2013

VRITTAM (21 JULY 2013 - 27 JULY 2013)

Detroit’s fall: Things to know about Chapter 9 bankruptcy protection

As Detroit filed for bankruptcy on July 18, 2013. Let us know what led to Detroit’s fall and what is Chapter 9 bankruptcy protection in US Federal law.

 

FIIs pull out $3 bn from Indian capital markets in July

The weakness in the Indian currency was instrumental in overseas investors exiting the debt markets. FIIs, a major participant in Indian stock market, have pulled out more than Rs. 17,000 crores (about $3 billion) from the Indian capital so far this month.

BLUEBERRY TAX

Today's word: BLUEBERRY TAX
Theme for this fortnight: TAXES



According to Maine, the production of wild blueberries is one of the most important agricultural industries in their state, making it necessary to protect it with a tax.
Without a tax, the precious blueberries of Maine could be over harvested. The state of Maine gets a penny and a half per pound, keeping the blueberry business in check, so that plants are able to thrive. This separate cent is applied to every pound of blueberries sold, on top of regular taxes.
 

Saturday 27 July 2013

WINDOW TAX

Today's word: WINDOW TAX
Theme for this fortnight: TAXES
 

Although it sounds ludicrous, the Window Tax of 1696 was actually a relatively ingenious way of imposing an income tax on the rich without ever calling it that.
Affecting England, Scotland, and Great Britain, in the 18th and 19th centuries, this tax on windows was actually meant as a tax on wealth, as people with more income generally live in nicer houses, and nice houses generally have more than two windows. While this tax directly led to the bricking up of many windows, it also eventually led to a fair and less arbitrary income tax that honed-in on wealthier citizens.

 

Thursday 25 July 2013

FLOWER BOND

Today's word: FLOWER BOND
Theme for this fortnight: TAXES


 
Fixed income products that were originally purchased by investors at a discount for the purpose of paying federal estate taxes upon their maturity. Investors would purchase these bonds before their death in anticipation of federal estate taxes. If the bondholder passed away, the bonds would mature at par value and be used as payment for the deceased's federal estate taxes. Also known as estate tax anticipation bonds, the last of these bonds matured in 1998.



Wednesday 24 July 2013

NANNY TAX

Today's word: NANNY TAX
Theme for this fortnight: TAXES

 
A federal tax that must be paid by people who hire household help (a babysitter, maid, gardener, etc.) and pay them a total of more than a specified threshold amount during the tax year. The reason the IRS charges the nanny tax is because it considers an ongoing household helper to be the taxpayer's employee. As such, the taxpayer becomes an employer and must pay Social Security, Medicare and federal unemployment taxes on the wages paid to that employee. There may be state-level nanny taxes as well.

 

Monday 22 July 2013

SIN TAX

Today's word: SIN TAX
Theme for this fortnight: TAXES

 
A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. These type of taxes are levied by governments to discourage individuals from partaking in such activities without making the use of the products illegal. These taxes also provide a source of government revenue.

 

Sunday 21 July 2013

DEATH TAX

Today's word: DEATH TAX
Theme for this fortnight: TAXES
 

A type of tax levied on the estate or inheritance of a recently deceased person. Examples of the death tax include inheritance tax and estate tax.

 

Saturday 20 July 2013

MARRIAGE PENALTY

Today's word: MARRIAGE PENALTY
Theme for this fortnight: TAXES

 
A consequence of the current tax system which results in most married people collectively paying more in taxes, whether they file jointly or separately, than they would if they weren't married, and were filing with single status. Various pieces of legislation have been passed which have removed this penalty in some circumstances, and currently the marriage penalty has been temporarily suspended for some of the lower tax brackets through 2010.



Friday 19 July 2013

PLAYING CARD TAX

Today's word: PLAYING CARD TAX
Theme for this fortnight: TAXES
 
        There’s a reason why Alabama is not known for its casinos, and this tax may be it. Alabama is the only state in the union to issue a 10-cent playing card tax for decks of cards purchased within the state.
        When compared to Nevada, a state that issues free decks of cards with every tax return filed, this tax seems quite silly. Nevertheless, Alabama citizens enjoy the revenue that is produced for highways and playgrounds. There is plenty of information on where an official playing card tax stamp can be purchased, but no explanation about the tax.

 

Thursday 18 July 2013

The Dance of Exchange rate

What affects exchange rate?

The exchange rate is a function of demand and supply of currency. Basically, anything that increases the demand of your currency will appreciate it. For example, if a country imports lot of oil, it will require dollars to pay for the imported oil and therefore will increase the demand of dollar and consequently dollar will appreciate. This is what is happening in India, oil import and gold import has swelled the current account deficit and led to rupee depreciation.

Another major factor analysts attribute to rupee depreciation is outflow of capital account, with FIIs continuously pulling money out of capital markets. Since January this year, FIIs have pumped in close to Rs 70,397 crore into the Indian equity market. The analysts speculate that US Fed chairman Ben Bernanke’s comments about the ‘necessity’ of the stimulus programme for the recovery of the US economy will encourage FIIs to invest again in emerging market equities such as India. But with the fears of a pullback in US monetary stimulus, combined with the lack of economic pick-up in India and a falling rupee, overseas institutions have started to reduce their exposure to Indian Capital Market.

JOCK TAX


Today's word: JOCK TAX
Theme for this fortnight: TAXES


 
What began as bitter blood has turned into a lucrative source of state funding, as taxing “jocks,” performers, and other entertainers, can generate serious revenue.
California first imposed the Jock Tax back in 1991, after the Chicago Bulls beat the LA Lakers in the finals. The next time “His Airness” played in Los Angeles, the money he made on those games was officially subjected to the California State Income Tax. Since that time, half of the states in the union have adopted a Jock Tax, taking a cut from high-paid heroes, and putting the added resources to work for local communities.

 


Wednesday 17 July 2013

GOOGLE TAX

Today's word: GOOGLE TAX
Theme for this fortnight: TAXES

 
The Culture Ministry of France determined taxing online advertisements, such as those that appear on Google, Facebook, and Digg, will accrue up to $29 million per annum. Microsoft, AOL, and Yahoo! will also be subject to the tax. France is eager to use this revenue to support artists and online cultural information centers for citizens of France.
According to 20 Minutes, President Nicolas Sarkozy is the pusher behind this revolutionary tax. While it currently ranks on the global oddities list, it could be enacted worldwide. Sarkozy, however, may just be playing out his vendetta with Google, as he has frequently complained that Google is “depriving” France of its culture and heritage by scanning French art for digital libraries.

 

Tuesday 16 July 2013

COW FLATULENCE TAX

Today's word: COW FLATULENCE TAX
Theme for this fortnight: TAXES
 

A key producer of methane, cow flatulence is leading cause of global warming. Their slow digestion, mixed with a gas-producing diet of greens, causes excessive methane build-up. The issue is compounded by slaughterhouses, which store thousands of cows in one location, creating large clouds of methane. Neighbours and environmentalists frequently complain about the odor, as well as the negative effects on air quality.
Ireland and Denmark, along with other EU nations, have begun taxing cattle owners on cow flatulence. The “byproducts” of livestock like cows are responsible for approximately 18% of the greenhouse gases that are causing global warming, according to the Food and Agricultural Organization of the UN. Just $18 per cow in Ireland, cow flatulence will cost Danish farmers $110 per cow.

 

Monday 15 July 2013

YELLOW KNIGHT

Today's word: YELLOW KNIGHT
Theme for this fortnight: ACCOUNTING


               A company that was once making a takeover attempt but ends up discussing a merger with the target company. Yellow knights have various reasons for backing out of the takeover attempt, but frequently are attributable to the target company's ability to fend off takeover. The "yellow" in "yellow knight" may refer to the colour's association with cowardice. Since a yellow knight backs down from a takeover attempt and retreats to merger discussions, a yellow knight may be viewed as weak.

 

Sunday 14 July 2013

IN SPECIES

Today's word: IN SPECIES
Theme for this fortnight: ACCOUNTING
                 A Latin phrase which means "in its actual form." It is used to indicate that distribution of an asset will be in its actual form, rather than transferring it into cash or another form. This will usually be done if cash simply isn't available, or if it works out better to distribute the asset itself.

 

Saturday 13 July 2013

EAT YOUR OWN DOG FOOD

Today's word: EAT YOUR OWN DOG FOOD
Theme for this fortnight: ACCOUNTING

 
              A slang term used to describe a company utilizing in-house inventory to maintain corporate sustainability during a financial crisis.



Thursday 11 July 2013

BLACK BOX ACCOUNTING


Today's word: BLACK BOX ACCOUNTING
Theme for this fortnight: ACCOUNTING


 
               Complex and confusing accounting methodology that makes financial statements hard to interpret by an untrained individual. This type of accounting attempts to hide unfavorable information by restating facts and including unnecessary information. Companies looking to appear more profitable to potential investors will sometimes utilize this form of accounting.


Wednesday 10 July 2013

CORRIDOR RULE

Today's word: CORRIDOR RULE
Theme for this fortnight: ACCOUNTING
 
 
                   An accounting standard that applies to the fluctuation of pension assets which must be reported as an increase of decrease in the value of plan assets. The rule, which requires positive or negative returns be reported if they exceed 10% of the plans assets, allows for gains and losses to spread out over time resulting in a smoothing effect.

 

Tuesday 9 July 2013

Will the upcoming Banks survive the Licensing Ordinances?

‘The Indian Banking system has emerged unscathed from the crisis. We need to ensure that banking system grows in size and sophistication to meet the needs of modern economy. Besides, there is need to extend the geographic coverage of banks and improve access to banking services. In this context, I am happy to inform the Honourable members that RBI is considering giving some additional banking licenses to private sector players. Non-Banking Financial Companies could also be considered, if they meet the RBI’s eligibility criteria’.                                                                                          
                                                   -Pranab Mukherjee

              This was the statement made in the budget speech 2010-11 by the then Finance Minister Shri Pranab Mukherjee, after which RBI put a discussion paper on its website and year after draft guidelines were released for ‘licensing of new banks’ on RBI’s website on August 29, 2011. The final guidelines have been released after almost one and half years by taking into consideration the feedback to the draft guidelines from different stakeholders. And now that the guidelines for “Licensing of new banks in the private sector” had been finalised on February 22, 2013, let us first see what are the restrictions that seem challenging to the entities applying for the license for new banks.

COOKING THE BOOKS

Today's word: COOKING THE BOOKS
Theme for this fortnight: ACCOUNTING

 
                    Knowingly providing incorrect information in a company's financial statements. It is considered illegal.

Monday 8 July 2013

FAT CAT

Today's word: FAT CAT
Theme for this fortnight: ACCOUNTING

 
     A slang term that associates bloated salaries and investments for chief executive officers (CEOs) and chief operating officers (COOs) of large companies.



Sunday 7 July 2013

ANDERSON EFFECT

Today's word: ANDERSON EFFECT
Theme for this fortnight: ACCOUNTING

 
 
          An increased scrutiny of a company's financial statements due to the collapse of Arthur Andersen LLP after the 2001 Enron Scandal, a seminal event which spurred the rise of conservative accounting.





Saturday 6 July 2013

FORENSIC ACCOUNTING

Today's word: FORENSIC ACCOUNTING
Theme for this fortnight: ACCOUNTING


 
           A method of accounting that deals with financial procedures that have been challenged or charged as illegal. One example of forensic accounting is examining insurance fraud claims.




Thursday 4 July 2013

OUTCRY'13

 
 
 
 
 
 
 






















FINATIX - INDIAN INSTITUTE OF MANAGEMENT RAIPUR

             FINATIX – The Finance Club of Indian Institute of Management Raipur is a forum of likeminded enthusiasts willing to make their career in the high world of finance, and to bolster their knowledge continuously and share their knowledge with all the students who are interested in making their career in finance. The club organizes events like quizzes, games, workshops, seminars etc. where in the participants self assess their financial quotient and raise the bar every time. The club helps in identifying the individual financial strengths and seeks the guidance of experts on various aspects by way of industry interaction and fosters industry academia interaction. The club creates opportunities and provides a platform for simulation of real world scenarios so that each and every student is equipped with right kind of financial acumen.

Mission:           

            The club aims to keep abreast with the current developments in the field of finance and focuses on research in areas such as financial markets, instruments, regulations, etc. The club operates under the guidance of esteemed faculty on key aspects of finance and latest trends. The club aims at providing outside the classroom learning opportunities in the field of finance, to arrange speaker sessions and workshops which encourage continuous learning and provide a platform to learn the elements which the industry looks out for. It seeks to connect with the industry in all possible ways to bridge the gap between industry and classroom.

CATS AND DOGS

Today's word: CATS AND DOGS
Theme for this fortnight: ACCOUNTING
 
             Colloquial term used for speculative stocks or low grade stocks that have questionable histories on revenues, earnings, and other data points. In some cases the questionable histories are due to a company being relatively new and not having a well-established financial history. Other times, it can be due to questionable accounting.


Tuesday 2 July 2013

BIG BATH

Today's word: BIG BATH
Theme for this fortnight: ACCOUNTING




          The process of manipulating a company's earnings to make them appear worse than they truly are. Losses are expanded so that the company can mislead investors and shareholders. Big bath accounting reduces the amount of assets held by the company so that future quarterly performance will appear better than it truly is. This type of procedure is typically used during a bad year. For example, a company may elevate sales declines to a level that will help future losses appear minimal.