ASSESSABLE SECURITY Meaning and
Definition
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An assessable security is a financial instrument that can be subject to additional fees or assessments by the issuing company or entity. These fees are levied on the security holder as a means of covering ongoing expenses related to the security. Assessable securities are often issued by some corporations as a means of raising funds or capital. This type of security can be contrasted with non-assessable securities, which do not carry the same potential for additional fees.
Assessable securities are typically issued with the understanding that investors may be required to contribute further funds, should the need arise. The issuing company reserves the right to assess additional fees or assessments on the security holder if it deems it necessary. These assessments are intended to cover costs such as operating expenses, debt repayments, or other financial obligations the company may have.
Investors who hold an assessable security must be aware of the potential for additional fees and assessments and be prepared to contribute further funds if required. Failure to meet these additional obligations could result in legal consequences or loss of the investment.
Overall, assessable securities provide a means for companies to raise capital and potentially share ongoing costs with investors. It is important for investors to carefully read and understand the terms and conditions associated with assessable securities to make informed investment decisions.
Etymology of ASSESSABLE SECURITY
The etymology of the term "assessable security" can be broken down as follows:
1. Assessable: The word "assessable" derives from the verb "assess", which comes from the Old French word "assesser", meaning to "fix a tax or charge". It ultimately traces back to the late Latin word "assessare", meaning to "tax or value".
2. Security: The term "security" comes from the Latin word "securitas", which means "freedom from care" or "safety". It stems from the combination of the Latin prefix "se" (meaning "without") and the root word "cura" (meaning "care" or "concern").
Bringing these two components together, an "assessable security" refers to a financial instrument or investment that can be evaluated and taxed.
