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Par Value: see nominal value.

Parent Company: company which controls one or more subsidiaries in a group.

Partnership: two or more persons in business together with the aim of making a profit.

Partnership Deed: a document setting out the agreement of the partners on how the partnership is to be conducted (including the arrangements for sharing profits and losses).

Partnership Law: legislation which governs the conduct of a partnership and which should be used where no partnership deed has been written.

Portfolio (of Investment): a collection of investments.

Portfolio of Shares: a collection of shares held by an investor.

Preference Shares: shares in a company which give the holder a preference (although not an automatic right) to receive a dividend before any ordinary share dividend is declared.

Preliminary Announcement: the first announcement by a listed company of its profit for the most recent accounting period. Precedes the publication of the full annual report. The announcement is made to the entirestock market so that all investors receive information at the same time.

Premium: an amount paid in addition, or extra.

Prepayment: an amount paid for in advance for an benefit to the business, such as insurance premiums or rent in advance. Initially recognised as an asset, then transferred to expense in the period when the benefit is enjoyed. (Also called a prepaid expense.)

Present Fairly: a condition of the IASB system, equivalent to true and fair view in the UK ASB system.

Price–Earnings Ratio: market price of a share divided by earnings per share.

Price-Sensitive Information: information which, if known to the market, would affect the price of a share.

Primary Financial Statements: the balance sheet, profit and loss account, statement of total recognised gains and losses and cash flow statement.

Principal (Sum): the agreed amount of a loan, on which interest will be charged during the period of the loan.

Private Limited Company (Ltd): a company which has limited liability but is not permitted to offer its shares to the public.

Production Overhead Costs: costs of production that are SPREAD across all output, rather than being identified with specific goods or services.

Profit: calculated as revenue minus expenses.

Profit and Loss Account: financial statement presenting revenues, expenses, and profit. Also called income statement.

Prospective Investor: an investor who is considering whether to invest in a company.

Prospectus: financial statements and supporting detailed descriptions published when a company is offering shares for sale to the public.

Provision: a liability of uncertain timing or amount.

Provision for Doubtful Debts: an estimate of the risk of not collecting full payment from credit customers, reported as a deduction from trade receivables (debtors) in the balance sheet.

Prudence: a degree of caution in the exercise of the judgements needed in making the estimates required under conditions of uncertainty, such that gains and assets are not overstated and losses and liabilities are not understated.

Public Limited Company (PLC): a company which has limited liability and offers its shares to the public.

Purchase Method: method of producing consolidated financial statements (see acquisition method).

Purchases: total of goods and services bought in a period.