6 Canadian tax & accounting terms starting with F
Plain-language definitions, each with the CRA rule it comes from and the filings it affects.
Fair Market Value (FMV)
Fair market value is the price a property would sell for between a willing buyer and a willing seller, both informed and acting freely, used throughout tax law to value transactions.
Financial Statements
Financial statements are the formal reports summarising a business's financial position and performance, primarily the balance sheet, income statement and cash flow statement.
Fiscal Year
A fiscal year is the 12-month period a business uses for accounting and tax, which does not have to align with the calendar year.
Fixed Asset
A fixed asset is a long-lived, tangible item a business owns and uses to generate income, such as equipment, vehicles, machinery or buildings.
Fixed Cost
A fixed cost is a business expense that stays the same regardless of how much you produce or sell, such as rent, insurance and salaried wages.
Foreign Tax Credit
A foreign tax credit reduces your Canadian tax by the amount of income tax you already paid to another country on the same income, preventing double taxation.
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