The sale of debts to a third party in return for an upfront payment. Receipts will usually be less than the original debt, the difference being held by the “factoring” company (usually a bank) as a margin of safety for security.

Fair value

Refers to a current valuation, as opposed to the historic cost, derived either from a market value or by a calculation of the present value.


An individual/institution responsible for holding and managing the assets and interests of another, for example a guardian, trustee or administrator.

FII (franked investment income)

Dividends paid by UK companies to other companies with a tax credit reflecting the fact that the company which has paid the dividend has done so out of post tax profits.

Final dividend

The end of year dividend.

Finance Charge

Interest accrued on and fees charged for credit, repressing the total of borrowing.

Financial institution

An institution that accepts funds from the public and reinvests in financial assets, e.g. bank deposits and stocks.

Financial intermediaries

Name given to institutions such as banks and building societies.

Financial statement

A report that contains key financial information about a business.Standard statements will include a Balance Sheet, Profit and Loss Account, and Cash Flow Statement.

Fiscal policy

The use of spending and taxation by the government in order to achieve its economic objectives.

Fiscal year

12 month period commencing 6th April and ending 5th April the following year.

Fixed assets

Assets likely to be used by a business for more than a year to generate profits and can include land, property and equipment.

Fixed overhead

Include expenses such as rent, utilities and loan repayments that will not tend to change when in line with sales volumes.


The listing of a companies shares on a stock market, also known as an initial public offering (IPO).

Foreign direct investment

Investment in tangible assets such as land and capital involving cross border flows.

Forensic Accounting

The application of accounting facts gathered through auditing methods and procedures to resolve legal problems.

Forward buying contract

Contract between a buyer and a seller agreeing the delivery/provision of a specified amount of a specified asset at a specified future date at a price agreed at the time of the trade.

FRA (Forward Rate Agreement)

An interest rate derivative that allows the interest rate on a short-term loan to be set for a pre-determined period.


A licence granted by one company (franchisor) to another company/individual (franchisee), entitling the franchisee to produce/market a product/service in a specific area.


The permanent ownership of land or buildings.

Fringe benefits

Benefits to employees additional to salary.

FSA (Financial Services Authority)

The regulating body carrying all regulatory responsibilities for the UK financial services industry.

Futures contract

A legal agreement to make or take delivery of a specified instrument, e.g. a commodity or a bond, at a fixed future date at a price determined at the time of dealing.