Glossary of Financial Terms and Acronyms

This page includes definitions of commonly used financial terms and acronyms.

Terms

accounts payable: The money you owe to vendors for goods or services received.

accounts receivable: The money your customers owe you for goods or services you have provided.

accrual basis:  A method of accounting that records transactions as they occur, rather than waiting until cash is exchanged. For NetSuite purposes, this means that the Treasurer should determine at 31 December if the unit has incurred revenue or expenses but the cash has been neither received nor paid.  If the unit has incurred revenue or expenses without cash being exchanged, the revenue and expense accrued but not received should be reported in NetSuite. Otherwise, during the year, the revenue and expenses should be recorded based on the cash basis as noted below. 

accrued expenses: Expenses that are incurred, and are unpaid at the accounting year-end of 31 December, are reported on the accrual basis. Accrual basis accounting is defined above.

accrued liabilities: Assets or expenses that have been incurred in the current year, but unpaid at the accounting year-end of 31 December. If an asset was purchased, the purchase price should be reported in NetSuite.

assets: Economic resources that are owned or controlled by an entity.

bank reconciliation: The process of comparing the cash balance as reported by the bank with the cash balance on the unit’s books and identifying the reason for any differences. This process should be completed in NetSuite.

book value of depreciable assets: The difference between the cost of any depreciable asset and its related accumulated depreciation is referred to as the book value of that asset.

cash: Coins, currency, money orders, checks, and funds on deposit with financial institutions. Cash is the most liquid of assets.

cash basis: An accounting method that reflects only cash activity. Revenue is recorded when cash is received, and expenses are recorded when cash is disbursed. This is contrasted with the accrual basis, defined above.

cash disbursements: Money paid out, generally by check, to vendors for goods and services.

cost basis: The original purchase price of an asset.

Concentration Bank Account:  This is an IEEE banking program that pools or "concentrates" participating units' surplus cash into one account. The funds are invested short-term until participating unit checks are presented for payment. Interest is paid on the daily balance and credited to each participating unit’s account on a monthly basis. For more information on this banking program, please email IEEE Staff at concentration-banking@ieee.org.

custody accounts: These are holding accounts available to Sections in Regions 8, 9, and 10, which may have difficulty exchanging currency to pay for memberships and other IEEE services. Section rebates are deposited to these accounts. The accounts are administered via the IEEE Member and Geographic Activities Department. Email IEEE Staff at finance-solutions@ieee.org for more information.

liabilities: Obligations measurable in monetary terms that represent amounts owed to creditors, governments, employees, and other parties.

MGA: IEEE acronym for Member and Geographic Activities.

petty cash fund: A small amount of cash kept on hand for making miscellaneous payments.

prepaid postal expense: Funds forwarded to local post offices for payment of future postal expenses, which are considered prepaid before they are used. Upon usage, the prepaid postal expense is reduced and current year expenses are increased.

realized gains and losses: Gains and losses resulting from the sale of securities in an arm's length transaction.

rebates: IEEE provides funding for each Section in the form of a rebate. A rebate payment is sent to the Section upon the receipt and approval of all required annual reports. The Section is responsible for providing funding to its subunits.  The required reporting to receive a rebate includes all financial activity booked in NetSuite, meeting reports, and list of current officers for the Section and all subunits. Calculation of the rebate and other details can be found on the rebate schedule.

receivables: Money due to you for sale of goods, services performed, pledges, etc.

statement of net worth: (statement of financial position) The financial statement that shows the assets, liabilities, and the net assets of a unit on a particular date.

SSVR funds: "Section Support via Regions" or SSVR funds are limited funds that are allocated to Regions to assist Sections having financial difficulties. To apply for this assistance, a Section must submit a request for financial assistance to their respective Region Director, who will review the request for approval. 

Straight-line Depreciation Method: The depreciation method in which the cost of an asset is allocated equally over the periods of the asset's estimated useful life.

useful life: The term used to describe the life over which an asset is expected to be useful. Cost is assigned to the periods benefited from using the asset..

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