Debit notes

Issued when a payment is short on the full amount owed.

Debt financing

The raising of capital via the selling of bonds and other debt instruments.


When a debtor fails to meet principal or interest payments on the due date of their debt.


Process of rendering a contract or deed null and void following a specified act.

Deferred income

Income that a company has received in cash, but has not yet earned.

Deferred tax

A future tax asset or liability resulting from temporary differences between the tax value and book value of assets and liabilities, or timing differences between the recognition of gains and losses for tax and for financial statements.

Defined benefits pension scheme

A pension plan in which an employee’s pension benefit is related to the number of years service and final salary.

Defined contribution pension scheme

A pension plan in which benefits are dependent on contributions and the growth of the pension fund.


A situation in which there is a fall in the general price level of goods and services.

Demand deposit

Is a bank deposit account where withdrawals can be made without the need for giving advance notice.

Demand note

A note sent to debtors that is considered to be payable on demand.


Corporate restructuring in which one part of a company is spun off as a new company.


Process by which building societies and mutual insurers convert themselves from organisations owned by their members to profit-making companies which distribute profits to their shareholders.

Departmental accounting

Where a company has different departments that have a variety of different autonomies.


1. Payment given with the promise/guarantee that a service will be completed 2. Placing cash into an account 3. Money offered as a form of security in return for an item.  


Charge to account for an assets reduced value as its useful economic life is exhausted.


A security whose value is based on the value of an underlying asset such as commodities, bonds, stocks and equities.


Formal reduction in the value of a currency with respect to another.

Directors’ report

Statement within the annual report/statutory accounts prepared by the company directors, in accordance with the Companies Act, detailing information including: directors in service during the period under review; the principal activities of the business; dividend recommendation; a review of the business. The size of the company dictates the level of disclosure required in the report.


Monies paid out, for example by a solicitor, to cover costs incurred on a clients behalf, such as court fees.

Discretionary trust

Private trust empowering trustees to use their discretion in distributing funds to beneficiaries.


The removal of an intermediary from a transaction.

Disposable income

Assessments of a household’s income after tax deductions and additional benefits have been made.


The end of the legal existence of a business.


Distribution of capital among various assets or industries, usually to reduce risk.


Distribution of company profits, after tax to shareholders in proportion to their shareholding. The payment and amount of dividend is at the discretion of the directors.

Dividend cover

Ratio between a company’s earnings (net profit after tax) and the net dividend paid to shareholders. It is calculated as earnings per share divided by the dividend per share.

Dividend growth

The amount by which a company’s yearly dividends grow.

Dividend yield

Measures how much income a shareholder is getting out of the company for the capital invested in it. It is calculated as the annual dividend income per share received from a company divided by its current share price.

DLA (directors loan account)

Company asset or liability relating to monies owed from or owed to the directors.


Country in which a person lives for tax purposes.

Double taxation

Situation in which money is taxed in two different countries.

Double taxation relief

Double taxation relief can be obtained when agreements exist between countries whereby tax already paid on income in a foreign country is offset against the same tax liability in the home country or vice versa.

Doubtful debt

A debt considered to have a low probability of being collected.

Due diligence

Process of checking as much as possible about a company’s financial performance and its liabilities, usually undertaken before one company acquires another.