Definition of "ADB (Adjusted Debit Balance)"

Under Regulation T of the Federal Reserve Board, it is the formula that is used to determine the status of a margin account. An account's ADB is useful for ascertaining whether withdrawals of cash or securities are acceptable based on Special Miscellaneous Account (SMA) entries. The ADB is calculated by netting the balance owed to the brokerage firm with any balance in the SMA plus unrealized profits on short accounts.