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Income Approach: Definition and Overview The income approach (or income capitalization approach) is a real estate valuation method that estimates a property’s market value based on the income it produces. It is commonly used for income-producing properties and is one of three primary appraisal methods (the others are the cost approach and the sales-comparison approach)….

Income Annuity: What It Is and How It Works Key takeaways An income annuity (also called an immediate annuity or single-premium immediate annuity — SPIA) converts a lump-sum premium into a stream of periodic payments that typically begin within a month. Payments can be fixed or variable, paid monthly, quarterly, semiannually, or annually, and can…

Income: What it Means and How it’s Taxed Definition Income is any compensation or benefit received in exchange for work, the sale of goods, or capital investment. It includes wages, salaries, tips, dividends, interest, retirement distributions, and gains from selling assets. Most income is taxable, though specific types and amounts may be excluded or taxed…

Incidental Expenses (IE): Definition and Key Points Incidental expenses are minor costs incurred while conducting business, typically ancillary to larger expenses like transportation, meals, or lodging. Common examples include tips to hotel staff or taxi drivers, fees for mailing a business gift, baggage fees, and small supplies purchased during travel. Key takeaways: * Incidentals are…

Incidence Rate: Definition, Calculation, and Examples An incidence rate measures how often new events (for example, disease cases, accidents, or financial defaults) occur in a defined population during a specified time period. It tracks only new occurrences, not existing or cumulative cases, and is a core metric in epidemiology, clinical research, market research, and some…

Incentive Stock Options (ISOs) What they are * Incentive stock options (ISOs), also called statutory or qualified stock options, give employees the right to buy company stock at a fixed strike (exercise) price. * They’re typically used for management and key employees as a compensation and retention tool. The value to the employee depends on…

In the Money (ITM) Definition An option is “in the money” (ITM) when it has intrinsic value — meaning the option holder could exercise it immediately for a favorable price (before trading costs and commissions). – Call option ITM: market price of the underlying is above the strike price (holder could buy below market). –…

In Specie Transfers: Definition and Practical Guide Key takeaways An in specie transfer moves an asset in its existing form instead of converting it to cash. Common assets transferred in specie include stocks, bonds, real estate, art, and other property. Such transfers can defer realization of capital gains (tax consequences typically occur when the recipient…

In‑Service Withdrawal: Definition, Rules, Taxes & Penalties What is an in‑service withdrawal? An in‑service withdrawal is a distribution taken from a qualified, employer‑sponsored retirement plan (for example, a 401(k)) while you are still employed by the sponsor. Plans may allow these distributions for reasons such as hardship, first‑time home purchase, or simply to move funds…

In-House Financing What is in-house financing? In-house financing is when a seller or retailer provides the credit directly to the buyer instead of relying on a bank or third-party lender. It lets consumers purchase goods and services and repay the seller over time. This model is common for high-ticket purchases such as cars, appliances, furniture,…

In-House: Definition, Benefits, Risks, and When to Choose It What “in‑house” means In‑house (also called insourcing) describes activities performed by a company’s own employees rather than by external contractors or vendors. Examples include in‑house legal teams, IT, marketing, payroll, or finance functions such as dealer financing. Key takeaways In‑house work gives a company direct control…

In Escrow: What It Means and How It Works “In escrow” describes a contractual arrangement in which money, property, or other assets are held by a neutral third party until specified conditions are met for transfer between a buyer and a seller. Escrow provides security and ensures that each party’s obligations are satisfied before a…

In-App Purchasing: Definition, Benefits, and Security Risks In-app purchasing is the purchase of goods or services from inside a mobile application (smartphone or tablet). It lets developers distribute a basic app for free while monetizing through paid upgrades, feature unlocks, virtual items, subscriptions, or ad removals sold from within the app. How it works Developers…

Imputed Interest: Definition, Calculation, and Key Tax FAQs Imputed interest is the interest the IRS treats as having been paid or received when a loan carries no interest or a below-market interest rate. It’s a tax construct the IRS uses to prevent untaxed transfers of income through interest-free or low-interest loans, commonly seen in family…

Imputed value Key takeaways Imputed value is an estimated or assumed value assigned when an actual value is unknown or unobtainable. It’s commonly used for intangible assets, opportunity costs, missing time-series data, and nonmarket goods and services. Imputed values are useful for analysis but are estimates and can be subject to error—use with caution. What…

Impulse Wave Patterns Explained Key takeaways * An impulse wave is a five-wave structure that moves in the direction of the larger trend (three motive waves and two corrective waves). * It follows three strict rules: Wave 2 cannot retrace Wave 1 fully, Wave 3 cannot be the shortest of Waves 1, 3, and 5,…

Imprest An imprest is a small, fixed cash fund kept on hand to pay routine, incidental business expenses. The fund is replenished periodically to restore it to its predetermined balance, making it easy to track spending and detect discrepancies. Key points Maintains a fixed petty cash balance that is periodically replenished. Used for small, routine…

Impression (Online Advertising) Overview An impression is a basic metric in digital marketing that counts each instance a piece of content—typically an advertisement, post, or web page—is displayed. Impressions measure how often content is served or has the potential to be seen; they do not indicate whether a user clicked, engaged with, or paid attention…

Import Substitution Industrialization (ISI) What ISI Is Import Substitution Industrialization (ISI) is an economic strategy used by developing countries to reduce dependence on imported goods by fostering domestic production. Governments pursuing ISI protect and promote local industries so they can supply goods previously imported, with the goal of creating more self-sufficient, diversified economies. How ISI…

What Is Import Duty? Import duty (also called customs duty, tariff, import tax, or import tariff) is a tax imposed by a country’s customs authorities on goods brought into that country. Duties are intended to raise government revenue, protect domestic producers from foreign competition, and, at times, influence trade policy toward specific countries or products….

Import: Meaning, Benefits, Challenges, and Examples What is an import? An import is a good or service produced in one country and purchased by another. Imports, together with exports, form the basis of international trade and directly affect a country’s balance of trade—the difference between what it exports and what it imports. Why countries import…

Implied Volatility (IV) What is implied volatility? Implied volatility (IV) is the market’s estimate of how much the price of an underlying asset (stock, ETF, index, etc.) is expected to move over a given period. It is expressed as an annualized percentage and reflects expected magnitude of price change — not direction. Higher IV =…

Implied Rate: Definition, Formula, and Examples The implied rate measures the percentage difference between a security’s spot price and its forward or futures price over a given time period. It’s a useful way to compare expected returns across assets and to infer market expectations about future interest rates or carrying costs. Key takeaways The implied…

Implied Contracts: Definition, Types, Examples, and Rules Key takeaways * An implied contract is legally binding and arises from parties’ actions, conduct, or circumstances rather than an explicit written or oral agreement. * Implied contracts carry the same legal force as express contracts but can be harder to prove. * Two main forms exist: implied-in-fact…

What is implied authority? Implied authority is the unstated power an agent has to take actions reasonably necessary to perform their role on behalf of a principal. Even when not expressly written or spoken in a contract, implied authority can create legally binding commitments between the principal and third parties when the agent acts within…

Implicit Cost What is an implicit cost? An implicit cost is an opportunity cost that arises when a firm uses resources it already owns instead of renting, selling, or employing them elsewhere. No cash changes hands and the cost does not appear as an expense on financial statements, but it represents income the firm forgoes…

Imperfect Markets Key takeaways * Imperfect markets are the real-world norm; they deviate from the theoretical model of perfect competition. * Common features include limited competition, barriers to entry or exit, information asymmetry, heterogeneous products, and price-setting by firms. * Typical market structures are monopoly, oligopoly, monopolistic competition, monopsony, and oligopsony. * Policymakers may use…

Imperfect Competition What is imperfect competition? Imperfect competition describes market structures where individual firms have some ability to influence prices or where market conditions deviate from the strict assumptions of perfect competition. Unlike perfect competition—where many sellers offer identical products and no single firm can affect the market price—imperfectly competitive markets feature product differentiation, entry…

Impeachment: Meaning, Overview, and Examples Key points * Impeachment is the constitutional process by which Congress brings charges against high-ranking federal officers — including the president — for “treason, bribery, or other high crimes and misdemeanors.” * The House of Representatives has the sole power to impeach (bring charges); the Senate holds the trial and…

Impairment in Accounting What is impairment? Impairment is a significant, unexpected decline in an asset’s ability to generate future economic benefits. When an asset’s recoverable amount falls below its carrying value (original cost minus accumulated depreciation), companies must write the asset down to its fair value and recognize an impairment loss. This prevents overstating assets…

Impaired Credit: What It Is and How to Address It What is impaired credit? Impaired credit describes a decline in the perceived ability of an individual, business, or government to meet debt obligations. For individuals it usually shows up as a lower credit score; for companies and governments it appears as a lower credit rating….

Impaired Asset: Meaning, Causes, How to Test, and How to Record Definition An impaired asset is a company asset (tangible or intangible) whose carrying value on the balance sheet exceeds its recoverable amount — in other words, it is no longer worth its recorded cost and must be written down. Why it matters Recognizing impairment…

Impact investing directs capital to organizations and projects that intentionally generate measurable social or environmental benefits alongside financial returns. Key takeaways * Seeks both financial returns and positive social or environmental outcomes. * Can use many asset classes: public equities, bonds, private equity, loans, and funds. * Common approaches include ESG integration, socially responsible investing…

Immunization Immunization is a portfolio strategy that protects future cash flows and net worth from interest-rate movements by aligning the timing and sensitivity of assets with liabilities. It is commonly used by pension funds, insurance companies, banks, and individuals planning for specific future payouts. Key takeaways Immunization minimizes the impact of interest-rate changes by matching…

Immediate Payment Annuity (Single-Premium Immediate Annuity — SPIA) What it is An immediate payment annuity is a contract with an insurance company in which you pay a lump sum and begin receiving guaranteed income almost immediately—typically within a month. It’s also called a single‑premium immediate annuity (SPIA), income annuity, or simply an immediate annuity. Explore…