Glossary

A disclaimer is a statement by an accountant that the accountant did not perform the requisite audit work required to form an opinion as to the correctness of the financial statements or of the organization's financial condition. Disclaimers are most often issued when an accountant is not provided with sufficient supporting information during an audit. If an accountant issues a disclaimer in conjunction with an audit, investors, lenders, or other individuals reviewing the organization's financial statements should recognize that the information contained within such materials cannot be relied on as accurate.

A disclosure dollar loss refers to the total decline—that is, the dollar value change—in the market capitalization of a defendant company from the trading day immediately preceding the end of the class period to the trading day immediately following the end of the class period.

A discontinuance is a formal pleading submitted by the plaintiff in a legal action that terminates the lawsuit. In a civil lawsuit, a discontinuance is often necessary if a claim is settled prior to or during trial.

The discounted cash flow (DCF) analysis is a technique at the core of finance, where cash flow in the future is discounted due to uncertainty about future rates of return. The concept of the "time value of money" is at the heart of any DCF analysis. That is, money received now is better than money received in the future, and any investment must be evaluated against a baseline of other possible uses for that money.

The discount rate is the rate of interest at which a firm could earn income given a variety of potential scenarios. For example, in comparing disparate cash flow loss funding plans, comparing the net costs of each on a net present value basis allows the plans to be evaluated on a standard basis, using the firm's discount rate.

Discovery in an insurance context is the investigation of the facts of a claim or the alleged proximate cause of an injury. Discovery may include such activities as interrogatories, depositions, expert examination of a product, and review of a plaintiff's medical history.

The discovery cover is coverage for losses that are discovered during the term of a reinsurance treaty, regardless of when they occurred.

The discovery period in the insurance context is the period of time after expiration allowed an insured to identify and report losses occurring during the period of a policy or a bond.

Discovery provisions permit insureds to report incidents or circumstances that may result in claims in the future, found mainly in professional liability insurance policies written with claims-made coverage triggers. Discovery provisions, which are also known as "awareness" or "notice of potential claim" provisions, allow an insured to lock in coverage for such events so that coverage will apply under the current claims-made policy, regardless of how far in the future a claim is eventually made in conjunction with the incident that has been reported.

The discovery rule provides that the statute of limitations on bringing a claim does not begin to run until the date on which a claimant actually discovers (or should have discovered) an injury or loss—rather than on the date when the wrongful act giving rise to the injury or loss took place. The rule has the effect of lengthening the normal statute of limitations period applicable to many types of claims.