Accrual accounting is the recognition of economic events and other transactions involving revenues, expenses, assets, liabilities and equity as they occur, rather than when the flow of cash occurs.
Accrued expenses are those expenses which are incurred in the current year, but may not be paid until the following year, such as electricity and telephone costs.
Agency is used generically to describe the various organisational units within Government that deliver services. The term includes departments, commercialised business units, shared service providers, statutory bodies and Government-owned corporations.
Amortisation is the periodic allocation of the cost of intangible or non-physical assets (e.g. patents, research and development costs, copyrights) representing the amount of the asset consumed during a particular period of time.
Appropriation is the vehicle by which Parliament approves expenditure of monies from the Consolidated Fund. Appropriation is the process whereby Parliament gives approval to the Treasurer to issue funds to departments during the Budget year.
Appropriation Bill is a formal action by a legislative assembly that specifies exact amounts of the government's money that the Treasury may legally pay out (through new hiring, contracts for purchases, findings of individuals' eligibility for income transfer payments, etc.) for each of a list of particular pre-authorized programs carried out by governmental agencies over a specific period of time (normally one year).
Assets are physical and non-physical items of value that an agency owns and/or controls, and that are used in the delivery of services. Examples include buildings, x-ray machines, school laboratory equipment and computer hardware and software.
Audit is a view of the national accounts by an independent auditing firm to substantiate fiscal year-end funds, salaries, reserves, and cash on hand.
Balanced Budget is a budget in which revenues and spending are equal in a given year.
Balance sheet is a report outlining the assets, liabilities and equity (net worth) of an agency or a sector of Government, at a specified date.
Bilateral Grants represents funding from other governments.
Bond is a written promise to pay (debt) a specified sum of money (called principal or face value) at a specified future date (called the maturity date) along with periodic interest paid at a specified percentage of the principal (interest rate). Bonds are typically used for long-term debt to pay for specific capital expenditures.
Budget is an outline of the Government's priorities and plans for the coming year, including an outline of the State's fiscal and economic standing.
Budget Memorandum provides a summary review of the macro-economy, the performance of Central Government's Budget in the immediate past Financial Year as well as the aims/objectives of the new Central Government Budget. It also reviews the activities of the Public Sector Entities and the Selected Projects performance.
Budget Presentations are speeches and presentations to parliament each fiscal year.
Capital is a term used to refer to the stock of assets, including property, plant and equipment, intangible assets and inventories, that an agency owns and/or controls, and uses in the delivery of services. The term is also sometimes used to refer to capital grants made to other entities for the purpose of acquiring capital items.
Capital Expenditure: The capital account includes expenses connected with the purchase and upkeep of goods such as machinery in factories, school buildings, offices and roads. These projects are expensive, but they in turn help, in the production of other goods and services. The capital account, therefore, plays an important part in the country's economy, for as the stock of capital goods grows, production capacity increases. The capital account also includes income from Government owned profit-making enterprises and loans of various kinds.
Capital Revenue is the revenue raised through royalties, sale of land, divestment proceeds and external loans.
Cash flow statement is a financial statement that reports the inflows and outflows of cash for a particular period for the operating, investing and financing activities undertaken by an agency or a sector of Government.
Contingencies Fund is a fund established by the Constitution of some countries for use in emergencies such as natural disasters.
Consolidated Fund is the primary account to which all Government revenue is deposited and from which expenditure, through warrants is withdrawn.
Consolidation is the process of combining the financial statements of all Government agencies and eliminating the transactions that have occurred between agencies.
Contingent assets and liabilities are items which are not recognised in the balance sheet because they cannot be measured reliably or because there is a degree of uncertainty as to whether they will be realised.
Controlled items are assets, liabilities, revenue and expenses that are directly controlled by agencies, in that they relate directly to the agency's objectives.
Debt is the accumulation of past deficits.
Debt ceiling is the limit on the amount of debt the government allows itself to hold. The Legislature has the authority to raise the debt ceiling.
Debt Service Payment involves the payment of principal and interest charges on loans.
Deficit is the amount by which government expenditures (outlays) are greater than revenues (tax collections) in a given year.
Depreciation is the periodic allocation of the cost of physical assets, representing the amount of the asset consumed during a particular period of time.
Employee entitlements are benefits that employees accrue during their employment, such as annual and long service leave.
Equity is the surplus of assets over liabilities. It represents the Government's net financial interest in the agency.
Equity injection is an increase in the investment of the Government in a public sector agency.
Equity withdrawal is a decrease in the investment of the Government in a public sector agency.
Estimate of Expenditure is the legal financial document which provides details on the amount of money the Government intends to spend during the fiscal year.
Estimates of Expenditure include allocations to the government ministries, departments and agencies.
Expenses are the full accrual cost of delivering services to the community reported in the income statement. Controlled expenses include costs such as employee costs, supplies and services, grant expenses, and non-cash costs such as depreciation. Administered expenses generally relate to activities over which the agency does not exercise control.
Extended Fund Facility (EFF) is an IMF loan agreement that establishes a three to five year period of support for a country's Balance of Payments.
Financial statements are collective description for the income statement, statement of changes in equity, balance sheet, the cash flow statement and associated notes of agencies and the various sectors of Government.
Financing activities are activities, such as borrowing and equity adjustments, which provide additional balance sheet financing for an agency.
Fiscal policy is the measure used by the Government to manage the National Budget and to influence macro-economic outcomes.
Fiscal year (or financial year, or sometimes budget year) is a period that a company or government uses for accounting purposes and preparing financial statements. The fiscal year may or may not be the same as a calendar year. (see Fiscal Years in the Caribbean)
Foreign exchange is any currency other than the local currency which is used in settling international transactions. The term also refers to the system of trading in and converting the currency of one country into that of another. See also foreign exchange market.
The term foreign exchange is usually abbreviated as "forex" and occasionally as "FX."
Forward estimates are estimates (on a rolling basis for three years after each Budget year) of future baseline funding requirements. These estimates assume there will be no significant change in Government policy and are designed to provide agencies with a longer-term perspective.
Government Revenue is the amount of money the Government expects to earn or raise in order to finance public expenditure.
Gross Domestic Product (GDP) is a way of measuring the size of a nation’s economy. It’s the total value of all final goods and services produced in an economy in a given year. “Final” means the value of goods and services purchased by the final consumer, as opposed to the value of raw materials purchased by a factory.
Inflation is an increase in prices. Inflation occurs when the average price level across the economy – not just for a few goods – increases. So if the annual rate of inflation is 3 percent, then something you buy for $10 this year might cost $10.30 next year.
International Monetary Fund (IMF) is the international organisation responsible for monitoring the system of exchange rates between countries. While ensuring the stability of the international monetary system and to monitor.
Investing activities are activities which relate to the acquisition and disposal of property, plant, equipment and other capital items of an agency.
Liabilities are amounts an agency owes to another entity which are incurred in the course of doing business. Liabilities include items such as accounts payable, borrowings and employee entitlements, and other provisions.
Lobbying is the act of trying to influence lawmakers.
Monetary Policy is the economic measure employed by a monetary authority to monitor interest rates and the amount of money in circulation.
Multilateral Loans/Grants represents funding from international financial institutions such as the World Bank, the IMF and the Inter-American Development Bank (IDB).
National Debt Exchange is an exchange of debt instrument between the government and its creditors. The main debt investment instruments are government bonds. In the debt exchange process the borrower will offer the bond holders the opportunity to exchange existing old bonds for new bonds.
Operating activities are activities which relate to the provision of services by an agency.
Operating result is the accounting surplus or deficit of an entity. It provides an indication of whether the entity has sufficient revenue to meet expenses in the current year, including non-cash costs such as depreciation. Due to the inclusion of non-cash revenues and expenses, this differs from a cash surplus or deficit. An operating surplus indicates that revenues earned during the year are greater than the expenses incurred for the year, while an operating deficit indicates that expenses exceed revenues.
Per Capita means “per person.” For example, per capita GDP is GDP divided by population, which shows GDP on a per-person basis.
Performance indicators are data reported that informs the community about how government is progressing towards achieving its objectives.
Public Debt is the total amount of money owed by the Government.
Recurrent Expenditure: The recurrent account contains all the expenses that accrue in the carrying-out of services normally rendered by Government. Some of these expenses include wages and salaries of Government employees, and the upkeep of offices, factories, warehouses and farms. The recurrent account also contains an estimate of the revenue expected from taxes, such as import duties, income taxes, property taxes, licences, and consumption duties.
Recurrent Revenue is revenue earned from taxes as well as non-tax sources such as court fines, interest earned on investments, etc.
Revenues are the full accrual income arising from operations during the year, recorded in the income statement. Controlled revenues include revenue from the State Government in the form of payments for services, and own-source revenue such as user charges. Administered revenues are revenues which are forwarded to the Consolidated Fund and generally comprise taxes, fees and fines and royalty revenues.
Services are the actions or activities (including policy development) of an agency which contribute to the achievement of the agency's objectives.
Statutory bodies are agencies established by legislation for a specific purpose, which can operate either inside or outside the General Government sector.
Strategic planning is a cyclical process through which an agency determines its desired future direction in the light of environmental factors and the Government's key priorities.
Surplus is the amount by which revenues exceed expenditures in the budget.
Treasury Bills are short-term financing instruments used to meet Government cash flow needs.
Value-added tax (VAT) is an indirect tax, which is imposed on goods and services at each stage of production, starting from raw materials to final product. VAT is levied on the value additions at different stages of production.
Vote is the total cash amount appropriated for a department by Parliament in the annual Appropriation Act. The Act will also note how the total is distributed between departmental services, administered items and equity adjustments
Warrant is the written authority over the signature of the Minister of Finance and the Financial Secretary, authorising the Accountant General to transfer money from the Consolidated Fund to the various Government accounts listed in the warrants.