Ultimogeniture
What is ultimogeniture and how does it work Ultimogeniture is the practice of leaving property to the youngest child. It contrasts with primogeniture, in which property is typically passed down to the oldest child. Ultimogeniture has a long history, dating back to medieval Europe. In many cases, it was used as a way to ensure that property stayed within the...
Underlying Retention
What is retention and why does it matter for businesses Retention is a measure of how well a business can keep its customers over time. While it is important for businesses to acquisition new customers, it is even more important to retain the customers they already have. Studies have shown that it costs five times as much to attract a...
Underapplied Overhead
What is 'Underapplied Overhead' In cost accounting, an accounting record is created when the overhead costs ascribed to a work-in-progress product do not equal the amount of real overhead expenses incurred. In the company's balance sheet, underapplied overhead is recorded as a deferred expenditure, and at the end of the year, it is balanced by posting a credit to cost...
Unadjusted Basis
What is 'Unadjusted Basis' A basis used for depreciation purposes. Unadjusted basis uses the original cost of property or equipment without regard to salvage value. Explaining 'Unadjusted Basis' This method of calculating depreciation is used for accelerated cost recovery systems (ACRS) and modified accelerated cost recovery systems (MACRS). Further Reading The early...
Ultra-Short Bond Fund
What is an Ultra-Short Bond Fund Ultra-short bond funds are a type of fixed income mutual fund that invests in bonds with short-term maturities, typically one year or less. These funds offer higher yields than money market funds, but they also carry more risk since they are subject to interest rate changes. As a result, ultra-short bond funds are often...
Undercast
What is 'Undercast' A forecasting error that occurs when estimating items such as future cash flows, performance levels or production. Undercasting produces an estimation that is below the realized value. Explaining 'Undercast' There are a number of factors that may lead to undercasting values. The primary reason for undercasting involves using the wrong inputs....
Undated Issue
What is 'Undated Issue' A government bond that has no maturity date, and pays interest in perpetuity. While the government can redeem an undated issue if it so chooses, since most existing undated issues have very low coupons, there is little or no incentive for redemption. Undated issues are treated as equity for all practical purposes due...
Underfunded Pension Plan
What is an underfunded pension plan and how does it happen An underfunded pension plan happens when a company doesn't have enough money set aside to cover the costs of employee pensions. This can happen for a number of reasons, including poor investment returns, unexpected increases in life expectancy, or simply not putting enough money into the plan on an...
Underinsurance
What is underinsurance and why do people buy it Underinsurance is insurance that does not cover the full value of an insured asset. For example, if a homeowner has a house valued at $200,000 but carries insurance coverage of only $100,000, the homeowner is said to be underinsured by $100,000. There are several reasons why people buy underinsurance. One reason is...
Undervalued
What does 'Undervalued' mean Undervalued is a financial term referring to a security or other type of investment that is selling for a price presumed to be below the investment's true intrinsic value. A undervalued stock can be evaluated by looking at the underlying company's financial statements and analyzing its fundamentals, such as cash flow, return on...