Income - Inflow of REVENUE during a period of time. (See NET INCOME.)

Income Statement - Summary of the effect of REVENUES and expenses over a period of time.

Income Tax Basis - (1) For tax purposes, the concept of basis determines the proper amount of gain to report when an ASSET is sold. Basis is generally the cost paid for an asset plus the amounts paid to improve the asset less deductions taken against the asset, such as DEPRECIATION and AMORTIZATION. (2) For accounting purposes, a consistent basis of accounting that uses income tax accounting rules while GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) does not. (See OTHER COMPREHENSIVE BASIS OF ACCOUNTING.)

Independence Standard Board, the (ISB) - is the private sector standard- setting body governing the independence of auditors from their public company clients. It came about from discussions between the AICPA, other accounting representatives and the SEC.

Initial Public Offering (IPO) - When a private company goes public for the first time.

Insolvent - When an entity's LIABILITIES exceed its ASSETS.

Installment - Partial payment.

Installment Method - Tax ACCOUNTING method of reporting GAIN on the sale of an ASSET exchanged for a RECEIVABLE. In general, the gain is reported as the note is paid off.

Intangible Asset - Asset having no physical existence such as trademarks and patents. (See TANGIBLE ASSET.)

Interest - Payment for the use or forbearance of money.

Interim Financial Statements - FINANCIAL STATEMENTS that report the operations of an entity for less than one year.

Internal Audit - AUDIT performed within an entity by its staff rather than an independent certified public accountant.

Internal Control - Process designed to provide reasonable assurance regarding achievement of various management objectives such as the reliability of financial reports.

Internal Rate of Return - Method that determines the discount rate at which the present value of the future CASH FLOWS will exactly equal investment outlay.

Internal Revenue Code - Collection of tax rules of the federal government. Also referred to as Title 26 of the United States Code.

Internal Revenue Service (IRS) - Federal agency that administers the INTERNAL REVENUE CODE. The IRS is part of the United States Treasury Department.

International Accounting Standards Committee, the (IASC) - is an independent private sector body, formed in 1973, with the objective of harmonizing the accounting principles which are used in businesses and other organizations for financial reporting around the world. Its members are 143 professional accounting bodies in 104 countries.

Internet/World Wide Net - The Internet is the unregulate wild west show of computer networks connected together throughout the world. The world wide web or www, is part of the Internet.

Inventory - Tangible property held for sale, or materials used in a production process to make a product.

Investment - EXPENDITURE used to purchase goods or services that could produce a return to the investor.

IPO - See INITIAL PUBLIC OFFERING.

IRS - See INTERNAL REVENUE SERVICE.