Accounting concept according to which all incoming and outgoing payments (cash flows) of an investment project are considered to have occurred on the last day of the accounting year. The investment period, therefore, begins with the end of 'year-0.' In computing the cost of debt for discounting the forecasted cash flows, for example, this method computes the annual interest by multiplying the opening balance with the annual interest rate. When using the dates convention, in contrast, cash flows are recorded on the actual dates they occur. Both of these conventions are used in computing and comparing different approaches to the discounted future benefits of an investment.
Related information about end-of-year convention:
- End-of-Year Convention - Financial Dictionary - The Free Dictionary
Treating cash flows as if they occur at the end of a year as opposed to the date convention. Under the end-of-year convention, the present is time 0, the end of ...
- End of Year Convention - Financial Dictionary - The Free Dictionary
Treating cash flows as if they occur at the end of a year as opposed to the date convention. Under the end-of-year convention, the present is time 0, the end of ...
- What is end-of-year convention? definition and meaning
Definition of end-of-year convention: Accounting concept according to which all incoming and outgoing payments (cash flows) of an investment project are ...
- Cash Flows & Compound Interest
Cash flows can be broken into convenient groupings, but auxiliary totals must equal the total cash flow. End of Year Convention. For practicality (sacrificing a bit ...
- End-of-Year Convention Definition
End-of-Year Convention Handling cash flows in the same manner as in the event that they arise at year end instead of the date convention being followed.
- Mid-Year and End-of-Year Conventions in Achieving Convergence ...
Aug 12, 2011 ... I have shown that convergence among all methods can be achieved whether we use the End-of-Year Convention or Mid-Year Convention.
- Table of Contents
"End-of-Year Convention "Viewpoint of Economic Analysis Studies "Sunk Costs " Borrowed Money Viewpoint "Effect of Inflation and Deflation "Income Taxes ...
- Biases in Mid-Year and End-of-Year Conventions in Discounted - vLex
The end-of-year convention and the mid-year convention are two of the most widely used methodologies for discounted cash flow models in economic and ...