| Accounting Policies |
The ways the organisation has chosen, as being most appropriate to its circumstances, to apply standards set out in the Resource Accounting Manual.
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| Accounting Standards | Standards are issued or adapted by the Accounting Standards Board and are applicable to financial statements of an organisation that are intended to give a true and fair view of its state of affairs and of its income and expenditure.
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| Accruals Accounting | A method of accounting which records expenditure as it is incurred and income as it is earned during an accounting period. (Compare with cash accounting.)
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Administration Income/
Expenditure |
These relate to transactions controlled under the running costs or administration costs control regime. Programme income and expenditure is that which is not administration income and expenditure.
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| Aims | The main purposes for which a department exists. An aim is not necessarily quantifiable, but it gives direction to the department's activities. Aims, objectives and targets can be regarded as an hierarchy.
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| Amortisation | See depreciation.
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| Appropriation Account | An end of year account which compares amounts authorised by Parliament in Supply Estimates with actual cash payments made and receipts brought to account and explains any substantial differences. One is prepared for each Vote (see Vote).
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| Appropriations in aid (A in A) | Receipts which, with the authority of Parliament, are used to finance some of the gross expenditure on a Vote, thus reducing the amount to be issued from the Consolidated Fund.
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| Assets | Rights or other access to future economic benefits controlled by an entity as a result of past transactions or events.
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| Balance Sheet | A financial statement which shows the assets, liabilities and capital of an organisation on a particular date, normally the end of the accounting period. Further information about the balance sheet is set out in Annex C to the memorandum.
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| Book Value | The amount at which an asset is recorded in the accounts. Cost or value less accumulated depreciation.
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| Capital grants | Contributions towards expenditure on fixed assets made by central government departments to organisations in the private sector and other parts of the public sector.
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| Cash accounting | A method of accounting which records cash payments and cash receipts as they occur within an accounting period. (Compare with accruals accounting.)
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| Cash Flow Statement | A statement of cash inflows and outflows during an accounting period. Further information about the cash flow statement is set out in Annex C to the memorandum.
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| Consolidated Fund | The Exchequer account into which tax revenues and other current receipts not specifically directed elsewhere are made and from which payments for the largest part of central Government expenditure (that shown in the Supply Estimates) are made.
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Consolidated Fund Extra
Receipts (CFERs)
| Receipts related to expenditure in the Supply Estimates which Parliament has not authorised to be used as appropriations in aid.
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| Contingent Liability | A liability where the amount and likelihood of payment are uncertain, so it is not provided for in the balance sheet, only disclosed in the notes to the accounts.
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| Cost of Capital | The opportunity cost of capital invested.
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| Creditors | Suppliers and others to whom the organisation owes money. Sometimes referred to as accounts payable.
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| Debtors | Customers or others who owe money to the organisation. Sometimes referred to as accounts receivable.
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| Depreciation | A measure of the wearing out, consumption, or other reduction in the useful life of a fixed asset whether arising from use, passage of time or obsolescence through technological or market changes. For intangible assets the term amortisation is used instead of depreciation.
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| Fixed Assets | Assets, with an expected life of more than one year, held for use in an organisation.
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| General Fund | In a department's accounts the balance on the general fund represents its total assets less liabilities to the extent that it is not represented by other reserves.
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| Investments | Any application of funds which is intended to produce a return by way of interest, dividend, or capital appreciation.
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In-year Monitoring and
Control | The monitoring and controlling of departmental expenditure for consistency with the provision which has been agreed in the Survey, voted in Estimates and made subject to cash limits where they apply.
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| Lease | A finance lease is a lease that transfers substantially all of the risks and rewards of ownership of an asset to the lessee. An operating lease is a lease other than a finance lease.
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| Liabilities | Obligations to confer future economic benefits as a result of past transactions or events.
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Management Information
System | An information system designed to aid managers, at all levels in an organisation, in decision making processes.
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| Net Cash Requirement | The cash implications of a department's resource budget. It is the cash limit that will apply to Departmental spending.
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| Non-cash Costs | Costs which are not reflected by cash transactions affecting the organisation, but are costs incurred elsewhere on behalf of the organisation. Examples are the cost of capital charge and the audit fee. These are sometimes referred to as Notional Costs.
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| Non Operating Cost A in A | Receipts appropriated in aid of the resource based Estimate which are not operating income. Examples would be the sale of capital items or repayments of loans. Further details are set out in Annex C to the memorandum.
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| Objectives | Specific planned achievements. Objectives contribute towards an organisation's aims and should be expressed in a way which enables determination of their achievement. They can be regarded as part of a hierarchy of aims, objectives and targets.
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| Operating Cost Statement | A statement showing resources consumed during the year in support of both the department's own administration expenditure and its programme expenditure, net of departmental income. Further information about the operating cost statement is set out in Annex C to the memorandum.
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| Operating Income | This consists of appropriations in aid, negative public expenditure CFERs and any revenue CFERs which relate to the recovery of costs recorded in the operating cost statement, or which relate to returns on investments.
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| Opportunity cost | The cost of a resource in terms of its best alternative use.
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| Parliamentary Grants | Money voted by Parliament annually on the basis of departments' estimates of payments and receipts likely to arise in the year, to meet the services shown in Estimates.
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| Programme Income/Expenditure | These are transactions which are recorded against departmental programmes and are not classified as administration income/expenditure.
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| Public Dividend Capital (PDC) | A form of long term Government finance for certain public sector bodies, on which the Government is paid dividends rather than interest.
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Public Expenditure Survey
(PES) | The annual review of public expenditure plans for 3 years ahead.
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| Request for Resources (RfR) | An accruals based measure of current expenditure which forms part of a resource based Estimate. It represents the basic unit of Parliamentary control, set at broadly the same level as existing Votes.
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| Resource Accounting | The application of accruals accounting to central government.
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| Resource Based Estimate | Each department would have a single resource based Estimate which summarises the resources and cash to be voted by Parliament for a particular year.
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| Resource Budgeting | Resource budgeting covers planning and controlling public expenditure on a resource accounting basis.
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| Resource Budget Outturn | Net operating cost, adjusted to exclude income and expenditure items outside the Treasury's public expenditure control total.
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| Revaluation Reserve | An account which records, where appropriate, the revaluation of fixed assets and stock.
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Statement of Recognised Gains
and Losses
| Displays gains or losses arising. Further details are set out in Annex C to the memorandum.
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| Stock | Goods purchased for resale, consumable stores, raw materials and finished goods.
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| Supply Estimates | A statement presented to the House of Commons of the estimated expenditure of a department which asks for the necessary funds to be voted.
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| Tangible Assets | Assets having a physical identity (eg buildings, plant and machinery). (Intangible assets are those such as patents and copyright.)
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| Taxpayer's Equity | The taxpayer's interest in the department, components include the general fund, revaluation reserve and donated assets reserve. Further details are shown in Annex C to the memorandum.
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UK Generally Accepted
Accounting Practice (GAAP)
| The accounting and disclosure requirements of the Companies Act (1985) and amendments by the Accounting Standards Board (principally accounting standards and Urgent Issues Task Force abstracts), supplemented by accumulated Professional judgement.
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| Vote | An individual Supply Estimate (so called because the procedure by which Parliament authorises expenditure is to vote Supply).
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| Working Capital | Current assets less current liabilities. Sometimes referred to as Net Current Assets.
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