Accounting

Glossary – Accounting

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There are 18 names in this directory beginning with the letter I.
IASB
International Accounting Standards Board (IASB).

IFRS
International Financial Reporting Standards (IFRS).

IMA
The acronym for Institute of Management Accountants, an international organization dedicated to enhancing management accounting and financial management. It offers various programs and networking opportunities. IMA also awards the Certified Management Accountant designation to members who have successfully passed its CMA Exam and have met its experience requirements.

Impairment
A decrease in the value of a long term asset to an amount that is less than the amount shown under the cost principle.

In-kind
Goods or services provided instead of money.

Inappropriate retained earnings
The regular retained earnings. Retained earnings that have not been restricted.

Income statement
One of the main financial statements (along with the balance sheet, the statement of cash flows, and the statement of stockholders’ equity). The income statement is also referred to as the profit and loss statement, P&L, statement of income, and the statement of operations. The income statement reports the revenues, gains, expenses, losses, net income and other totals for the period of time shown in the heading of the statement. If a company’s stock is publicly traded, earnings per share must appear on the face of the income statement.

Incurred
A word used by accountants to communicate that an expense has occurred and needs to be recognized on the income statement even though no payment was made. The second part of the necessary entry will be a credit to a liability account.

Indenture
A document that discloses important information on bonds or preferred stock. Included in the indenture would be the call price, the actions that can occur if the company fails to pay the interest or dividend, etc

Insolvent
The inability to pay liabilities as they become due. Some consider a company to be insolvent when its current liabilities exceed its current assets.

Insurance
A contract to provide coverage or protection in exchange for a payment or “premium.” Examples of insurance protection include liability, property, business interruption, life, disability, etc. The company paying the premiums for the protection will have insurance expense and possibly an asset, Prepaid Insurance (if the premiums are paid in advance). The insurance company would have insurance premium revenues and possibly a liability, Unearned Insurance Premiums (if the premiums were paid in advance).

Intangible assets
Some examples of intangible assets include copyrights, patents, goodwill, trade names, trademarks, mail lists, etc. These assets will be reported at cost (or lower) on the balance sheet after property, plant and equipment. Trade names and trademarks that were developed by a company (as opposed to buying them from another company at a significant cost) may not appear on the balance sheet, even though they might be a company’s most valuable asset.

Interim financial statement
Financial statements issued between the official annual financial statements. For example, quarterly financial statements are interim financial statements.

Inventory
A current asset whose ending balance should report the cost of a merchandiser’s products awaiting to be sold. The inventory of a manufacturer should report the cost of its raw materials, work-in-process, and finished goods. The cost of inventory should include all costs necessary to acquire the items and to get them ready for sale.
When inventory items are acquired or produced at varying costs, the company will need to make an assumption on how to flow the changing costs

Inventory shrinkage
Inventory that is less than the expected amount. It might be associated with theft or damage.

Investments
The long term asset category of a classified balance sheet which appears immediately after the current assets. Listed in this category would be a bond sinking fund, funds held for construction, the cash surrender value of a life insurance policy owned by the company, and long term investments in stocks and bonds.

IRR
Internal rate of return.

IRS
Internal Revenue Service (IRS).