Inception of a lease
The date of the written lease agreement or, if earlier, the date of a commitment by the parties to the principal provisions of the lease. At this date a lease is classified as either an operating lease or a finance lease.
Income from continuing operation
The result of substracting operating expenses from gross profit. Income from operations is the amount before non-operating items and results from the entity’s primary ongoing activities such as selling goods or providing services.
Income from ordinary activities
The amount of income derived from primary operating activities of an entity.
Income statement(Profit and loss account)
The financial statement displaying components of profit or loss for the period of time shown in the heading of the statement.
All domestic and foreign taxes which are based on taxable profits.
A cost that is related to the cost object but cannot be traced to it in an economically feasible way, including the cost of indirect materials and indirect labor. Indirect costs are allocated to the cost object using a cost allocated method.
An entity is insolvent when it is unable to pay its debts as they come due. Some consider an entity to be insolvent when its short-term liabilities exceed its current assets.
The regular periodic payment that a borrower agrees to make to a lender in settlement of a liability.
The interior designer is responsible for the design of the finishes and furniture, fittings and equipment (q.v.) elements of a hotel. The interior designer may, if appointed at an early stage, be involved in the space planning of a hotel, but is often appointed at a later date.
International Accounting Standards (IAS)
Standards and interpretations adopted by the International Accounting Standards Committee (IASC).
Inventory turnover rate
This ratio is measured by the sales divided by the average inventory for the 12-month period. A higher inventory turnover rate reflects a lean entity.
The cost of inventory is determined using the following inventory valuation methods: item –by-item valuation, first-in first-out and weighted average. Inventory is valued at the lower of cost or net realizable value, applied an item-by-item basis in most instances.
Property (land or a building, or part of a building, or both) held to earn rentals or for capital appreciation purposes or both. This does not include owner-occupied property or any property used in the entity’s business.
Internal repairing and insuring. A leasehold agreement in which the tenant agrees to undertake internal repairs.
Internal rate of return. A method of assessment of capital projects in which future cash flows are discounted to equal the cost of the project. The rate of interest which is effective in achieving this is the internal rate Where there are several projects being contemplated, the one showing the highest internal rate of return is usually chosen.
The share capital that has been issued to shareholders. It includes the par value of shares plus share premium or less share discount. The most common form of share capital is the ordinary share.
Itemized valuation allowance for bad debts
A principle of accounting under which assets are measured item-by-ite; also called specific identification method or single asset valuation.
Method of estimating uncollectible accounts receivable based on the dates the charges were incurred and specific default risk for different age categories of accounts receivables.