Cash Charge
A charge off made by a company against earnings that requires an initial outlay of cash. Investopedia Says:
Oftentimes, when a company is attempting to downsize or increase efficiency, it will be required to take one time charges that it does not reasonably expect to occur on a consistent basis. In these events, companies will document an extraordinary charge on their balance sheets and take a charge against earnings.
The use of early retirement packages is an example of such charges. These are used to lure employees into retirement in order for the company to hire cheaper workers. Related Terms:
Accounting
Balance Sheet
Charge Off
Earnings
Non-Cash Charge |