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...

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BLUEBERRY TAX

Today's word: BLUEBERRY TAXTheme 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...

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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...

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FLOWER BOND

Today's word: FLOWER BONDTheme 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...

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NANNY TAX

Today's word: NANNY TAXTheme 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,...

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SIN TAX

Today's word: SIN TAXTheme 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.  &nbs...

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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.  &nbs...

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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...

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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...

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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...

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JOCK TAX

 Today's word: JOCK TAXTheme 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...

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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...

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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,...

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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...

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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...

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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. ...

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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...

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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,...

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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’. ...

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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...

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FAT CAT

Today's word: FAT CATTheme 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.  ...

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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. ...

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FORENSIC ACCOUNTING

Today's word: FORENSIC ACCOUNTINGTheme 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. ...

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OUTCRY'13

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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...

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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...

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BIG BATH

Today's word: BIG BATHTheme 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...

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