Improvement - EXPENDITURE directed to a particular
ASSET to improve its performance or useful life.
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
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
Interest - Payment for the use or forbearance of
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
Internal Control - Process designed to provide
reasonable assurance regarding achievement of various
management objectives such as the reliability of
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
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
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.