Financial term of the day, Saturday 25th of October 2014:

Target surplus (or Tied Surplus)

The capital that must remain in a life company in order to support the business already on the books. Target surplus is an amount held over and above the reserves and is needed due to the uncertain nature of the level and timing of future insurance claims. This capital may not be used for dividend payouts to shareholders.

Similar financial terms

Targeted repurchase
The firm buys back its own stock from a potential bidder, usually at a substantial premium, to forestall a takeover attempt.

Target zone arrangement
A monetary system under which countries pledge to maintain their exchange rates within a specific margin around agreed-upon, fixed central exchange rates.

Target payout ratio
A firm's long-run dividend-to-earnings ratio. The firm's policy is to attempt to pay out a certain percentage of earnings, but it pays a stated dollar dividend and adjusts it to the target as base-line increases in earnings occur.

Target firm
A firm that is the object of a takeover by another firm.

Target cash balance
Optimal amount of cash for a firm to hold, considering the trade-off between the opportunity costs of holding too much cash and the trading costs of holding too little cash.

Target surplus (or Tied Surplus)
The capital that must remain in a life company in order to support the business already on the books. Target surplus is an amount held over and above the reserves and is needed due to the uncertain nature of the level and timing of future insurance claims. This capital may not be used for dividend payouts to shareholders.

Surplus funds
Cash flow available after payment of taxes in the project.

Statutory surplus
The surplus of an insurance company determined by the accounting treatment of both assets and liabilities as established by state statutes.

Regulatory surplus
The surplus as measured using regulatory accounting principles (RAP) which may allow the non-market valuation of assets or liabilities and which may be materially different from economic surplus.

Capital surplus
Amounts of directly contributed equity capital in excess of the par value.

Did you know?

Middle East dollar market

A Middle East dollar market exists in Bahrain where eurodollars and other currencies are intermediated in by a number of Arab and non-Arab banks. Collectively these various regional banking centres make the eurocurrency market one of the largest moneymarkets in the world.


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