A
- Accounting organisation manual
- Description of accounting organisation and procedures, mandatory above 10 million dirhams of revenue.
- Audit committee
- Board committee responsible for overseeing financial reporting, internal control and audit.
B
- Balance sheet
- Financial statement that separately describes the company’s assets and liabilities at the closing date.
- Bank covenant
- Commitment to a bank to meet certain financial ratios; breaching it can make the loan immediately payable.
- Branch
- Establishment without its own legal personality, attached to a company.
- Business plan
- Document presenting the project, market, team and financial forecasts, to convince bankers and investors.
C
- CLT
- Local Tax Commission: the body that examines disagreements between the taxpayer and the tax authorities after an audit.
- CNRF
- National Tax Appeals Commission: the appeal body after the CLT or for certain files.
- Consolidation
- Aggregation of the accounts of a group’s companies to present accounts as if they were a single entity.
- Contractual audit
- Audit engagement requested voluntarily by the company, outside any legal obligation.
- Cost accounting
- Allocation of costs and revenues by product, activity or customer to calculate cost prices.
D
- Data room
- A physical or digital space where the target makes its documents available to buyers during due diligence.
- Discounted cash flows
- Valuation method based on the cash the company will generate in the future, brought back to its present value.
- Due diligence
- All the checks carried out on a company before buying it or investing in it.
E
- EBITDA
- Earnings before interest, tax, depreciation and amortisation; it approximates operating performance.
- Engagement letter
- Document setting out the scope, timetable, division of tasks and fees of an engagement.
- Equity method
- Consolidation method for companies under significant influence: only the share of equity is taken in.
- ETIC (notes to the accounts)
- Statement of additional information: the notes that comment on the other financial statements.
F
- Foreign exchange regulations
- Rules governing foreign currency transactions and financial flows between Morocco and abroad.
- Free cash flow
- Cash generated by the business after investments.
- Full consolidation
- Consolidation method that takes in 100% of the accounts of a controlled subsidiary.
G
- Goodwill
- Difference between the price paid for a company and the value of its net assets.
I
- IAS 36
- International standard on impairment of assets, which requires value tests.
- IFRS 9
- International standard on financial instruments, including provisioning for receivables.
- Internal control
- All the arrangements that keep activities under control, prevent errors and fraud and make information reliable.
L
- LBO
- Acquisition of a company financed partly by debt, repaid from its future cash flows.
N
- NPV
- Net present value: the sum of a project’s discounted future cash flows, less the initial investment.
P
- Payback period
- Time needed for a project’s cash flows to repay the investment.
R
- Request for tax relief
- Request for a tax remission based on the taxpayer’s situation, even when the tax is legally due.
- Revalued net assets
- Valuation method that takes the real value of assets, less liabilities.
- Risk map
- Inventory of an organisation’s risks, ranked by likelihood and impact.
S
- Shareholders’ agreement
- Agreement between shareholders that complements the articles of association: governance, transfer of shares, exit.
- Statement of sources and uses of funds
- Statement describing the resources available to the company and how they were used during the financial year.
- Statutory audit
- Statutory auditor engagement required by law for certain companies.
- Statutory auditor
- Professional responsible for the statutory audit, who certifies that the accounts are regular and give a true picture.
- Strategic workforce planning (GPEC)
- Forward-looking management of jobs and skills.
T
- Transfer pricing
- Prices of transactions between companies in the same group, reviewed by the tax authorities.
V
- Vendor due diligence
- Due diligence commissioned by the seller to prepare the sale and reassure buyers.
W
- Warranty and indemnity
- The seller’s commitment to compensate the buyer for risks arising before the sale.
- Working capital requirement (BFR)
- Working capital requirement: inventory and trade receivables, less trade payables. It measures the cash tied up in operations.
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