amount equal to the net realizable value. The market cannot exceed the ceiling (upper limit) when employing the lower of cost or market method of inventory valuation. If market is greater than the ceiling, the ceiling is chosen. For example, if market is $12 and ceiling is $9, the inventory value would be $9. However, if market was below the ceiling, the market value would be used.
- >
- maximum deposit interest rate permitted on interest-bearing deposit accounts by Federal Reserve Regulation Q The Regulation Q rate ceiling gradually was phased out in the 1980s, when deposit interest rates were decontrolled, allowing banks and savings institutions to compete openly for deposit dollars by paying depositors market rates for savings accounts and certificates of deposit. The legal interest rate ceiling, jointly administered by banking regulatory agencies, was originally intended to ensure that all financial institutions, no matter how large or small, had equitable access to consumer deposits. See also depository institutions deregulation and monetary control act; market rate of interest.
- usury ceiling, the highest rate of interest permitted by state law on consumer installment loans and other extensions of credit.
- in foreign exchange, the price level of a particular currency that triggers intervention by central banks in the exchange markets.
highest level allowable in a financial transaction. For example, someone buying a stock may place a ceiling on the stock's price, meaning they are not willing to pay more than that amount for the shares. The issuer of a bond may place a ceiling on the interest rate it is willing to pay. If market interest rates rise beyond that ceiling, the underwriter must cancel the issue.
