The Institute of Management Accountants (IMA) is a professional organization focused on advancing management accounting and finance, recognized globally for its certifications and educational resources.
Institutional advertising is a form of image advertising intended to change the public perception of a company in various dimensions such as environmental issues, health, product safety, or other public matters. It aims to create a positive public awareness of a company and distinguish it from competitors.
An institutional investor is an organization, such as a bank, insurance company, or pension fund, that trades in very large volumes of securities. Institutional investors tend to dominate stock exchanges in many countries.
An institutional lender is a financial intermediary who invests in loans and other securities on behalf of depositors or customers. These institutions are heavily regulated to mitigate risks and play a crucial role in both the primary and secondary markets for loans and securities.
In accounting and finance, an instrument refers to any document or financial asset that represents some form of value, usually a legal document that records a right to pay a sum of money or property. Common examples include promissory notes, checks, bonds, and other financial securities.
An instrumentality refers to a federal agency whose obligations, while not direct obligations of the U.S. government, are sponsored or guaranteed by the government and backed by the full faith and credit of the government. These agencies issue various financial instruments such as notes, certificates, and bonds to support their respective mandates.
Insurability is the circumstance in which an insurance company can issue life or health insurance to an applicant based on standards set by the company. It evaluates the risk and determines if the applicant qualifies for coverage.
Insurable interest refers to the legal right to insure arising out of a financial relationship, criminal liability, or a connection that warrants protection through an insurance policy for a person or entity.
Insurable risk refers to a risk that meets the criteria set by an insurance company, allowing it to be covered by an insurance policy. This type of risk must be measurable, accidental, standardly classified, and have a premium proportional to the potential loss.
An insurable title is a type of title to real estate that a title insurance company deems acceptable for insurance, ensuring the buyer is protected against potential defects or issues with the property title.
An insurable title is a title to real estate that a title insurance company agrees to insure, signifying it is free from significant defects that could result in financial losses to the owner or lender.
Insurable value refers to the cost of total replacement of destructible improvements to a property; it is often based on replacement cost rather than market value.
Insurance is a system whereby individuals and companies concerned about potential hazards pay premiums to an insurance company, which reimburses (in whole or part) them in the event of loss. The insurer profits by investing the premiums it receives. Some common forms of insurance cover business risks, automobiles, homes, boats, worker's compensation, and health. Life insurance guarantees payment to the beneficiaries when the insured person dies. In a broad economic sense, insurance transfers risk from individuals to a larger group, which is better able to pay for losses.
An insurance agent is a representative of an insurance company who sells the firm's policies. Independent agents sell the policies of many companies. Agents must be licensed to sell insurance in the states where they solicit customers.
An independent broker who searches for the best insurance coverage at the lowest cost for the client. Insurance brokers do not work for insurance companies but for the buyers of insurance products.
An insurance claim is a formal request made by the insured to an insurance company for payment of a benefit related to an incident covered by their insurance policy.
An insurance company is a business entity that provides coverage, by contract, wherein the insurer agrees to compensate or indemnify another party (the insured) for specified loss or damage arising from certain risks.
An insurance company, also referred to as an insurer, is an organization that underwrites insurance policies. There are two principal types of insurance companies: mutual and stock.
An insurance contract is a legally binding unilateral agreement between an insured and an insurance company. In exchange for premium payments, the company covers specified perils or losses.
Insurance coverage refers to the total amount and type of insurance a policyholder possesses. It encompasses various forms covering different risks, safeguarding individuals and businesses against potential losses.
Money paid, usually once a year, to policyholders with participating policies. Dividend rates are based on the insurance company's mortality experience, administrative expenses, and investment returns. Policyholders may choose to take these dividends in cash or may purchase additional life insurance.
An insurance limit is the maximum amount an insurance company will pay under a policy for a covered loss.
An insurance policy is a contract between an insured person or entity and an insurance company, specifying the risks covered and the premiums that must be paid to maintain the policy. It serves as the reference document to determine coverage eligibility for claims.
Insurance premiums are the amounts paid to an insurance company to cover potential hazards. These payments can have tax implications and differ in deductibility based on whether they are made by businesses or individuals.
An insurance settlement involves receiving proceeds from an insurance policy. The terms of the settlement are outlined in the policy and may include options like immediate lump sums or periodic payments.
An individual or entity whose interests are protected under an insurance policy designed to indemnify against loss of property, life, health, etc.
An insured account is a type of account maintained at banks, savings and loan associations (S&Ls), credit unions, or brokerage firms that are protected by federal, state, or private insurance organizations. These accounts are safeguarded against losses, subject to certain limits.
Parcels sent via the U.S. Postal Service that are insured for loss or possible damage by paying an insurance fee. A claim is then filed if the package fails to arrive at its destination.
An insurgent is a person who challenges the current state of affairs. Insurgents typically belong to a group that aims to overthrow the current leadership or regime and establish a new order.
An insuring agreement in a liability insurance policy outlines the obligations of the insurer to provide coverage for specific risks or events that may result in a claim against the insured.
The section of a property and casualty insurance policy that details the parties involved, policy duration, premium requirements, insurance limits, insured property specifics, considerations, covered perils, and policy assignment conditions.
Intangible assets represent non-physical assets that hold significant financial value for a company. This article explores their definition, examples, accounting treatment, and related standards.
Costs incurred in drilling, testing, completing, and reworking oil and gas wells, such as labor, core analysis, fracturing, drill stem testing, engineering, fuel, geologists' expenses; as well as abandonment losses, management fees, delay rentals, and similar expenses.
Intangible property represents possessions that hold real value but do not have a physical presence. Examples include stock certificates, bonds, promissory notes, and franchises.
An intangible reward is a nonmonetary incentive given for performance, which does not necessarily require formal recognition from others. It serves as motivation and appreciation, often in a subtly communicated way.
Intangible value represents non-physical assets that have a significant impact on an entity's worth, such as goodwill, brand recognition, and intellectual properties like trademarks and patents.
Integrated accounts refer to a comprehensive set of accounting records that seamlessly combines both financial accounting and cost accounting into a single coherent system. This integration eliminates the need for reconciling separate financial and cost records, ensuring consistency, accuracy, and efficiency in data management.
An integrated circuit, abbreviated as IC, is an electronic device consisting of many miniature transistors and other circuit elements on a single silicon chip. These components work together to perform complex functions, making ICs fundamental to modern electronic devices.
An Integrated Office System (IOS) is a software suite used primarily in personal computers or small-scale business computers that consolidates multiple functionalities typically performed by standalone applications, such as spreadsheets, word processors, database management systems, and graphics.
Integrated Reporting (IR) is a holistic approach to corporate reporting that combines financial and non-financial performance information to provide a comprehensive view of an organization’s ability to create sustained value over the short, medium, and long term.
A telecommunications technology offered by telephone companies that provides transmission speeds up to 128Kbps. ISDN can simultaneously transmit voice, data, and video over the same line and requires specialized equipment including a network terminator and an ISDN adapter.
An embedded audit facility created by auditors within a client's accounting system to continuously monitor and test internal processing functions using fictitious entities and transactions.
An Integrated Test Facility (ITF) is a method of testing system processes and controls within a real-time environment using fictitious entries to help detect errors, weaknesses, and any material misstatements.
Integration refers to the process of combining different parts into a whole, whether it involves uniting various racial groups in society or merging distinct business functions to enhance productivity. This term is extensively used across multiple domains such as social sciences, business, technology, and engineering.
Integration with Social Security is a method of reducing an employee pension based on the Social Security benefits the employee receives. This approach aims to coordinate a company's pension plan with Social Security to ensure adequate retirement income for employees.
Integrity is a quality characterized by honesty, reliability, and fairness, developed in a relationship over time. Customers and clients have much more confidence when dealing with a business when they can rely on the representations made.
Intel Corporation is a leading manufacturer of microprocessors, known for its innovative technologies and key role in the development of PCs. Headquartered in Santa Clara, California, Intel has a significant impact on the global technology landscape.
Intellectual capital is a complex and multifaceted concept that includes human knowledge, information systems, brand names, and reputation. It is crucial for understanding the true value and performance of a company.
Intellectual property (IP) refers to creations of the mind, such as inventions, literary and artistic works, designs, and symbols, names, and images used in commerce.
Intensive distribution is a method of distribution where products are given maximum exposure through positioning in as many outlets as possible. It aims to ensure that the product is accessible to the customer wherever they are, enhancing convenience and increasing market coverage.
The Latin term 'inter alia' translates to 'among other things' and is commonly used in legal, academic, and formal writing to indicate that what is being referred to is part of a larger group or list.
The Inter Bank Offered Rate (IBOR) is the average interest rate at which a selection of banks on the interbank market is prepared to lend to one another.
An inter vivos transfer refers to the transfer of property or an interest in property during a person's lifetime. This term is derived from Latin, meaning 'between the living.' It is commonly used in estate planning and tax contexts to differentiate such transfers from those occurring after death.
An Inter Vivos Trust, also known as a living trust, is a legal arrangement established during the lifetime of the grantor, typically for the benefit of another person, such as a child. This differs from a Testamentary Trust, which becomes effective upon the death of the trust creator.
An interactive system is a computer system where the user and the computer communicate in real-time using input devices such as a keyboard and display devices like a CRT monitor. These systems provide immediate feedback to user commands.
The interbank market is a global network of financial institutions engaged in lending and borrowing activities, primarily focused on short-term loans and foreign exchange transactions.
The interbank rate is the interest rate that banks charge one another for short-term loans, enabling them to manage liquidity and meet regulatory requirements.
Intercompany transactions, also known as intragroup transactions, refer to the exchanges of goods, services, or charges between companies within the same corporate group. For the purposes of preparing consolidated financial statements, these transactions must be eliminated or adjusted to accurately reflect the group's transactions with external parties.
The Intercontinental Exchange (ICE) is the world's leading electronic market for energy and soft commodities contracts, established in 2000.
Interest is the charge applied for borrowing a sum of money, typically expressed as a percentage of the principal loan amount. Interest calculations can vary based on whether simple or compound interest is used, influencing financial decisions significantly.
Interest cover, also known as the fixed-charge-coverage ratio, is a financial metric used to assess a company’s ability to meet its interest obligations from its earnings before interest and tax (EBIT).
Interest deductions refer to the tax deduction of interest paid on various types of loans. This guide will explore the different types of interest deductions available, their limitations, and their applications.
An interest group is an organized group that seeks to influence public policy or advance a particular position or agenda. These groups often mobilize their members around issues of common concern and may disband once their objectives are achieved or interest wanes.
Interest income refers to the earnings obtained from various types of investments where the payment reflects the time value of money or from transactions where payments are made for the use or forbearance of money.
Interest earned on dividends from a participating life insurance policy left on deposit with the insurance company and subject to taxation.
The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal. It also refers to the earning rate for deposits held in a financial institution.
An Interest Rate Swap (IRS) is a contractual agreement between two counterparties to exchange periodic payments based on a notional principal amount, typically involving the exchange of a fixed-rate payment stream for a floating-rate payment stream.
A ledger account credited with interest receivable until received, after which it is moved to the bank and credited to the profit and loss account for the period.
Interest sensitive policies are a newer generation of life insurance policies that are credited with interest currently being earned by insurance companies on these policies, ensuring that policyholders can potentially benefit from favorable economic conditions.
An interest-in-possession trust ensures that the income generated by the trust's assets goes to a specific beneficiary or beneficiaries for a fixed period or until the life tenants' death. Subsequently, the capital passes to the remainderman.
An interest-only loan is a type of loan where the borrower is required to pay only the interest for some period of the term, usually until the loan reaches maturity. At the end of that period, the principal is due in full. Unlike traditional loans, it does not require regular principal amortization during the term.
An indemnity sold by a financial institution to protect the purchaser against the effects of future interest rate movements. It allows customers to specify the terms of protection.
Interest-Rate Risk, also known as interest-rate exposure, refers to the risk arising from changes in interest rates. These changes can impact the value of fixed-interest assets and liabilities, cause mismatches in asset-liability repricing, and influence prepayment and reinvestment activities.
An interface is a point of interaction between different data processing devices, systems, or components, allowing them to communicate and operate together. Interfaces can handle data exchanges, convert signals, and ensure effective connectivity and interoperability.
Interfirm comparison is a process used to evaluate the performance of similar organizations by analyzing their accounts and statistical data through ratio analysis.
An interim audit is the examination of the financial records and operations of a company during the course of the financial year, ensuring accuracy and compliance prior to the final year-end audit.
An interim dividend is a type of dividend paid to shareholders during a company's financial year, prior to the annual dividend payout. It serves as an indication of the company's current profitability and financial health.
Interim financial statements are financial reports covering a period of less than one full fiscal year, typically used by companies to provide updated information to stakeholders between annual reports.
Interim financial statements are financial reports issued for periods shorter than a full fiscal year, often used by companies to report on financial health and performance at interim intervals.
Interim Financing, also known as bridge financing or a bridge loan, is a short-term loan arrangement, generally spanning less than three years, utilized when a borrower is unable or unwilling to secure long-term or permanent financing. It often serves to provide temporary funding while waiting for financial or market conditions to improve.
An interim statement is a financial report of a public corporation covering only a portion of a fiscal year, typically issued quarterly to provide an update on financial performance.
Interindustry competition refers to the competition that develops between companies operating in different industries. For example, an automobile company may compete with an aerospace company for a government manufacturing contract for a military subsystem.
An accounting system that maintains cost accounting and financial accounting information separately, regularly reconciling the two by use of control accounts.
An interlocking directorate refers to the practice where individuals serve on the boards of multiple companies. While legal for non-competing firms, it is restricted by the Clayton Anti-Trust Act of 1914 for competing companies.
An intermediate court decree issued before a final court decree. It deals with one or more parts of an issue until the final decree is issued resolving the matter.
An intermediary acts as a go-between in various capacity including executive recruiters, brokers and financial institutions that facilitate investment decisions on behalf of others.
Intermediate goods are materials or components that are transformed by production processes into another form, often used to create final goods. For example, steel is an intermediate good that can be transformed into automobiles or ships.
An intermediate holding company is a corporate entity that functions as both a holding company for a group of companies and as a subsidiary of a larger parent company. This dual role allows it to qualify for specific exemptions from publishing consolidated financial statements.
Refers to a period between the short and long term, with its specific duration varying depending on the context. For example, stock analysts typically consider it as 6 to 12 months, whereas bond analysts usually think of it as 3 to 10 years.
Intermediation refers to the activity performed by a bank, financial institution, broker or similar entity, acting as a go-between for two parties in a transaction. Intermediaries may accept some or all associated credit or commercial risks.
A manufacturing method where several different products are produced on the same production line, one after the other, to maximize productivity.
An internal audit is a self-conducted examination of an organization's operations, intended to evaluate and improve the effectiveness of internal controls, risk management, and governance processes.
An internal auditor is an employee who is responsible for providing independent and objective evaluations of the company's financial and operational business activities. They assess compliance with laws and regulations, ensure policies are effective, and help maintain organizational integrity.
The internal business-process perspective is a part of the balanced scorecard framework, focusing on the internal operations that enable companies to deliver value to customers and shareholders. This perspective examines the efficiency and effectiveness of internal processes and seeks to improve them continually.
An internal check is a set of company policies and procedures designed to safeguard property from theft and damage. This includes measures such as the use of locked fences to secure outdoor property.
Internal control encompasses measures that an organization implements to reduce opportunities for fraud or misfeasance. Examples include requiring multiple signatures on documents, enhancing security for stock handling, task division, maintaining control accounts, using special passwords, and handling computer files securely. It is crucial for internal audits to ensure the effectiveness of these controls to instill confidence in external auditors and management regarding the integrity of the organization’s operations.
An Internal Control Questionnaire (ICQ) is a structured set of queries used by auditors and management to evaluate the effectiveness of an organization's internal controls.
An Internal Control Questionnaire (ICQ) is a structured document used by auditors to evaluate the effectiveness of an organization's internal control system. By answering tailored questions, auditors can identify strengths and weaknesses within different operational cycles.
Internal control risk refers to the likelihood that internal controls within an organization will fail to prevent or detect financial reporting inaccuracies, leading to potential financial misstatements. It is a critical component auditors assess to ensure the accuracy and reliability of financial statements.
A comprehensive system of controls designed to facilitate orderly and efficient business operations, ensure adherence to management policies, safeguard assets, and maintain accurate and complete records.
