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Nonlinear Regression Nonlinear regression fits a model to data when the relationship between the independent variable(s) and the dependent variable is curved rather than a straight line. While simple linear regression models relationships with a straight line (for example, y = mx + b), nonlinear regression uses functions that produce curves (for example, logistic, exponential,…

Noninterest Expense What it is Noninterest expenses are a bank’s operating costs that are not interest payments. They include day-to-day overhead such as salaries, rent, IT, professional fees, and the amortization of intangible assets. These expenses are reported separately from interest expense and provisions for credit losses. How it works Banks classify expenses into two…

Nonforfeiture Clause: What it Is and How it Works A nonforfeiture clause is a standard feature in permanent life insurance policies that protects policyholders who stop paying premiums. It ensures that accumulated cash value—or a portion of the policy’s benefits—cannot be entirely lost when a policy lapses. This protection is most common in whole life…

Nonfinancial Asset: Definition, Valuation, and Examples A nonfinancial asset is an asset whose value derives from its physical characteristics or from rights that represent nonfinancial economic benefits. This category includes tangible items—real estate, machinery, vehicles, inventory—and intangible assets such as patents, trademarks, copyrights, and other forms of intellectual property. Nonfinancial assets appear on a company’s…

Nonfeasance: Meaning, Examples, and Related Terms What is nonfeasance? Nonfeasance is the failure to perform an act or duty that one is legally or contractually obliged to perform, where that omission causes harm or damage to a person or property. It describes inaction (not doing something that should have been done), as opposed to affirmative…

Understanding Nonelective Contributions: Benefits and Drawbacks What is a nonelective contribution? A nonelective contribution is an employer-funded deposit to an employee’s retirement plan that the employer makes regardless of whether the employee contributes. These contributions are typically fully vested and intended to boost employee savings, help meet nondiscrimination rules, and incentivize plan participation. How nonelective…

Noncurrent Liabilities: Definition, Examples, and Key Ratios What are noncurrent liabilities? Noncurrent liabilities (also called long-term liabilities or long-term debt) are obligations on a company’s balance sheet that are not due within the next 12 months. They contrast with current liabilities, which must be settled within one year. Why they matter Noncurrent liabilities help assess…

Noncurrent Assets Key takeaways * Noncurrent (long-term) assets are resources a company expects to hold and use for more than one year. * They are illiquid and are capitalized—costs are allocated over the asset’s useful life (via depreciation, amortization, or depletion). * Common balance sheet groupings: investments; property, plant, and equipment (PP&E); intangible assets; and…

Noncumulative Preferred Stock: Definition, How It Works, Types, and Examples What is noncumulative preferred stock? Noncumulative preferred stock is a class of preferred shares that does not entitle holders to receive unpaid or omitted dividends in the future. Preferred shares typically carry a stated dividend (a dollar amount or percentage of par value). If a…

Nonconforming Mortgage A nonconforming mortgage is a home loan that does not meet the purchase guidelines of government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, so it cannot be sold to them. Because these loans are harder for lenders to resell on the secondary market, they often carry higher interest rates and additional…

Nonce in Bitcoin Mining A nonce (number used once) is a critical component of Bitcoin’s proof-of-work system. Miners vary the nonce to change a block header’s hash until they find a value that meets the network’s difficulty target. This process secures the blockchain by making block creation computationally expensive and verifiable. Key takeaways The nonce…

Noncancellable Insurance Policy: What It Means and How It Works Key takeaways * A noncancellable disability policy guarantees that, as long as you pay premiums, the insurer cannot cancel the policy, reduce benefits, or raise your premiums during the policy term. * These policies are more expensive up front but provide predictable coverage and costs….

Noncallable: What it Means, How it Works What “noncallable” means A noncallable security cannot be redeemed early by the issuer (except in rare cases that trigger a penalty). At issuance the issuer commits to pay the stated interest or dividend rate until the security matures, protecting investors from premature redemption and the related reinvestment risk….

Nonaccrual Loan A nonaccrual loan is a loan that stops generating interest income for the lender because the borrower has failed to make required payments—typically for 90 days or more. At that point the lender stops recording accrued interest as income and recognizes interest only when cash payments are actually received. How nonaccrual loans work…

Nonaccrual Experience (NAE) Method The Nonaccrual Experience (NAE) Method is an accounting approach allowed under the Internal Revenue Code for handling bad debts on an accrual basis. It permits certain service providers to exclude from income the portion of revenue they determine, based on their historical experience and permitted formulas, is unlikely to be collected….

Non-Traded REITs — What They Are Non-traded real estate investment trusts (REITs) are pooled real estate investment vehicles that are not listed on public securities exchanges. They own and operate income-producing real estate (office buildings, shopping centers, apartments, healthcare facilities, etc.) but shares are illiquid because they do not trade on a secondary market. How…

Non-Taxable Distribution: Definition and How It Works A non-taxable distribution (also called a return of capital or non-dividend distribution) is a payment to shareholders that represents a return of part of their original investment, not a distribution of a company’s earnings. Because it is a return of capital, it is not taxed when received. Instead,…

Non-Sufficient Funds (NSF): What It Means and How to Avoid Fees Key takeaways * Non‑sufficient funds (NSF) occur when an account lacks enough money to cover a payment, often resulting in a returned transaction and an NSF fee. * NSF fees averaged about $34 according to CFPB data; overdraft fees are separate and apply when…

Non-Security: Definition, Markets, and Valuation What is a non-security? A non-security (also called a real asset) is an investment that is not bought or sold on public exchanges. Examples include fine art, rare coins, collectibles, precious metals (physical gold, silver), gems, and direct real estate holdings. These assets typically lack centralized markets and continuous public…

Non-Sampling Error Overview A non-sampling error is any error that arises during data collection, processing, or analysis that causes results to differ from the true values and is not attributable to the fact that only a sample (rather than the entire population) was observed. Unlike sampling error, which results from the inherent variability when selecting…

Non-Renounceable Rights: What They Are and How They Work Overview A non-renounceable rights issue is an offer from a company giving existing shareholders the opportunity to buy additional shares—typically at a discount—proportionate to their current holdings. These rights are non-transferable: shareholders cannot sell them on the market and must either exercise them within the offered…

Nonrefundable Tax Credit A nonrefundable tax credit reduces the amount of income tax a taxpayer owes, dollar for dollar, but only down to zero. Any portion of the credit that exceeds the taxpayer’s liability is forfeited and does not produce a refund. How it works Tax credits are applied after taxable income and deductions have…

Understanding Non-Recourse Finance Non-recourse finance refers to loans that are repaid only from the cash flow or proceeds of the specific project or collateral pledged for the loan. If the borrower defaults, the lender can seize the collateral but generally cannot pursue the borrower’s other assets or seek a deficiency judgment. Key points Repayment is…

Non-Recourse Debt: Definition, Comparison, and Examples Non-recourse debt is a loan secured by specific collateral—commonly property—where the lender’s recovery in the event of borrower default is limited to the collateral itself. The lender cannot pursue the borrower’s other assets or income to make up any shortfall after the collateral is seized and sold. Key takeaways…

Non-Qualifying Investment: Definition, Examples, and Tax Treatment What is a non-qualifying investment? A non-qualifying investment is an asset or account that does not receive special tax-deferred or tax-exempt status under tax law. These investments are typically purchased with after-tax dollars and do not benefit from the contribution limits, tax deferral, or tax-free withdrawal rules that…

What is a Non‑Qualified Stock Option (NSO)? A non‑qualified stock option (NSO) is a contract that gives an employee the right to buy a set number of company shares at a fixed price (the exercise or grant price) for a limited time. NSOs do not meet the IRS requirements for incentive stock options (ISOs), so…

Non-Qualified Plan What is a non-qualified plan? A non-qualified plan is an employer-sponsored, tax-deferred retirement or compensation arrangement that falls outside of ERISA (Employee Retirement Income Security Act) rules. These plans are typically used to provide additional retirement savings or deferred compensation for key executives and other select employees. Because they are not subject to…

Non‑Qualified Deferred Compensation (NQDC) and 409A Plans Overview Non‑qualified deferred compensation (NQDC) plans let employees defer receipt of earned compensation to a future date. For for‑profit employers, these arrangements are governed by Internal Revenue Code Section 409A (commonly called “409A plans”); similar arrangements for nonprofits or government employers fall under IRC Section 457(b) or 457(f)….

Non-Purpose Loan — What It Means and How It Works Key takeaways A non-purpose loan uses investment securities as collateral but cannot be used to purchase, carry, or trade securities. It lets investors access cash without selling holdings while retaining dividends, interest, and appreciation. U.S. lenders must disclose whether a loan is a non-purpose loan…

Nonperforming Asset (NPA) What is an NPA? A nonperforming asset (NPA) is a loan or advance on which the borrower has stopped making scheduled payments of principal and/or interest. Loans typically become classified as nonperforming after a prolonged period of non-payment—commonly 90 days—but the specific threshold can vary by contract or regulator. A loan can…

Non-Owner-Occupied Properties — Meaning and Guide What it means A non-owner-occupied property is a one- to four-unit residential property that the owner does not live in. The term is commonly used for single-family homes and condominiums rented to tenants; it generally does not refer to larger multifamily apartment buildings. Why it matters Lenders classify occupancy…

Non-Operating Income Key takeaways Non-operating income comes from activities outside a company’s core business. Common sources include dividends, investment gains or losses, foreign exchange gains/losses, and one-time asset sales. Companies must report non-operating income separately on the income statement so investors can distinguish it from operating performance. Large or one-off non-operating gains can inflate reported…

Non-Operating Expense: Definition and Examples Key takeaways A non-operating expense is a cost that does not arise from a company’s core business activities. These expenses are reported below operating profit on the income statement and reduce earnings before taxes (EBT). Common examples include interest expense, losses on asset disposals, restructuring charges, and currency-exchange losses. What…

Non-Operating Asset: Definition, Balance Sheet Place, and Example What is a non-operating asset? A non-operating asset is any asset a company owns that is not essential to its core business operations but still has measurable value or can generate income. These assets are separate from operating assets (like production equipment or inventory) and are often…

Non-Objecting Beneficial Owner (NOBO) Key takeaways * A NOBO (non‑objecting beneficial owner) is a shareholder who allows their broker or other intermediary to release their name and address to the issuing company. * An OBO (objecting beneficial owner) instructs the intermediary not to release identifying information. * Companies use NOBO lists to send shareholder communications…