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Welcome to our Glossary section! We are very happy to see you here! This is the place where we will do our best to include as many terms from the accounting and financial world as possible so that we fully respond to your research and business needs.

Our team will constantly work on the content so that we make sure that you always stay satisfied with the information you obtain. We have sorted the terms alphabetically so that it is convenient for you to navigate through the section. In addition, we have integrated a special division dedicated to curious terms from the stock market. We hope you find them as much enjoyable as we do.

Sb Team wishes you a pleasant and fruitful navigation through our Glossary section!

Iceberg Order: A big volume order, structured in a smaller lots, with the mission the real volume of shares bought to be hidden. Usually big institutional investors use this method, who needs to buy/sell big volume of shares. Using this method, the rest of the investors can see only part of the whole deal or the so-called tip of the iceberg. This method prevents drastic movements into the shares’ price in case of drastic changes into their demand and supply.

Issuer: Every company which shares are on the stock market. Such company is called publically traded. Acquiring publicity or is it is known, putting shares for trading, is a voluntary decision, made by the company’s shareholders. An issuer can be also a company issuing debentures, as well as the country and the municipality.

Invested amount: The initial amount invested in the financial assets. Its value does not change unless there are sales or purchases of other new assets.

Index: A stock indicator, accountable for the price movements and changes of the stocks on the market for a group of companies. Stock indexes for Bulgaria, for example, are SOFIX, BG40, BGREIT, BGTR30.

Investment portfolio: All the financial assets which are included in which an investor has invested plus his free cash which is to be invested. In the portfolio a certain asset has a certain weight (the value of the asset compared to the value of the entire portfolio) and this weight determines the extent to which the asset will participate in forming the profitability of the portfolio. Usually the free cash do not bring any profit. But still, most of the investors prefer to maintain certain levels of free cash in their portfolio so that they can buy stocks without the need to sell other stocks or debentures from their investment portfolio.

Internal income: The total of the incomes of the companies and the citizens in one national economy.

Individual Proprietorship: A physical person, who is exercising a commercial activity in compliance with the commercial law of the country, for which it carries an unlimited responsibility.

Immunization: Actions directed towards protection of a certain investment portfolio from risks. Every portfolio can be immunized with the purpose of reaching the desired profitability regardless of the changes into the interest rates or the debentures’ prices. A debentures’ portfolio is considered immunized when the duration matches the period of possession by the investor. Banks can immunize their balance when keeping relatively constant duration of their assets and liabilities.

Investments: Financial resources directed towards acquisition of assets. There are two types of investments: fixed (when they are intended for acquiring fixed assets) and inventory investments (when they are intended for acquiring short-term assets, which are going to be used in the production process).

Inflation: Overall and relatively long term increase into the products’ and services’ prices, which leads to a decrease into the purchase capability of the currency and also makes the costs for living higher.

Indirect taxes: The taxes which are included in the products’ and services’ prices. The burden of the indirect taxes is being taken mostly by the consumers.

Indirect financing: Connecting between creditors and borrowers through a financial institution (financial mediator).

Interest: The price of the borrowed money.

Interest rate: A percentage correlation between the interest and the principal.

Interbank deposit: A deposit in one bank in another bank.

Items in process of collection: Uncollected yet amounts which exist in the documents and are included in the process of clearing.

Imperfect competition: A competition in which some companies, due to their market power, are capable of influencing the supply and demand and respectively the price.

Insolvent bank: A bank which deposit liabilities are greater than the volume of its assets.

Inventory: Raw materials, materials, equipment, international products and the unsalable production, the so-called products on stock.

Input market: A market of products and services intended for production use.

Income statement: A document generated monthly and/or annually that reports the earnings of a company by stating all relevant income and all expenses that have been incurred to generate that income. It is also referred to as a “profit and loss statement”.

Invoice: A document issued a document issued by a seller to a buyer listing the goods or services supplied and stating the sum of money due.

Initial balance in case of liquidation: Accounting balance from the beginning of the reported period to the date of the court order for pronouncing the company’s insolvency.

Individual financial statement: Financial statement which represents the financial and property condition, the calculated financial result, the changes of the cash flow and capital of one singular company, regardless of whether it is part of a group of companies (see group of companies) or not.

Investment activity: The acquisition and the sale of long term assets and other investments which are not included in the cash quivalents.

Income: An increase in the economic benefits through the accounting period in the form of the incoming flow or increase in the assets or decrease in the liabilities which leads to an increase of the company’s capital which is different from the increase of the share participation of the shareholders. The income includes the revenues and the profits.

Income from labour contract termination: Income of employees when the company has decided to terminate the labour contract of the employee before the time of pension or when the employee has agreed on a voluntary leaving in exchange for this income.

Interim period: A period for financial reporting which is shorter than a full fiscal year.

Intangible asset: An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. While intangible assets don’t have the obvious physical value of a factory or equipment, they can prove very valuable for a firm and can be critical to its long-term success or failure.

Investment property: The property (land or a building, or part of them) which is kept by the owner or the lessee of a financial leasing rather for acquiring of rent incomes or for the increasing of the capital than for the purposes of production or distributing goods or services.

Inheritance tax: The tax imposed on those who inherit assets from a deceased person. The tax rate for inheritance taxes depends on the value of the property received by the heir or beneficiary and his/her relationship to the decedent. It is not the same as estate tax, which is imposed on the total value of a person’s estate when that person dies. Rather, inheritance tax is imposed on the property that is passed to an heir.

International Monetary Fund: Established in 1944 in Bretton Woods with the purpose of financing temporary difficulties experienced by the countries with their payment balances, after the introduction of the stabilization programs by their governments. Today, the International Monetary Fund a global organization made up of 185 member countries with the purpose to oversee global financial health and provide assistance when needed to its members. The IMF states its goals as “to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment.”

Investment portfolio: A generalizing term, which represents the total amount of investments, done by a person or institution.

Income tax: A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

Initial capital: The initial investment to start a business. The funds, or capital, may come from a bank loan, a government grant, outside investors, or the business owner’s personal savings. The money is used to cover such startup costs as purchasing building, purchasing equipment and supplies, and hiring employees.

Interest risk: A risk associated with unexpected changes in the interest rate. If one company is financed with a bank loan instead of share capital, then in case of a sudden change in the interest rate it will have to face serious financial expenses.

Internal debt: Debt, which the government of a certain country owes to companies and households. This usually comes as a result of not enough high taxes to cover the state costs.

Indexation: A contract provision for prices correction in accordance with the real current values of the main points of the contract. The indexation is widely criticized because it confirms and institutionalizes the inflation.

Invisible handshaking: Unofficial agreement between the employer and the employee or between a company and its clients which is not legally determined. Employers undertake invisible handshaking with the purpose of reaching long-term benefits.

Inducement good: A commodity which stimulates the producers to produce other goods to replace to existing ones.

Intermediate good: A good which is used in the production of another good.

Invisible trade: International trading with intangible services, such as banking, insurance, tourism, shipping and consultation services. This is a basic economic activity in many leading financial services.

Investment climate: The economic and financial conditions in a country that affect whether individuals and businesses are willing to lend money and acquire a stake in the businesses operating there. Investment climate is affected by many factors, including: poverty, crime, infrastructure, workforce, national security, political instability, regime uncertainty, taxes, rule of law, property rights, government regulations, government transparency and government accountability.

Internal labour market: A labour market which exists in the structure of a big company. In such kind of companies usually are being hired young employees on the lowest levels of the corporate hierarchy since the other positions are being taken by the promoted employees of the company who have obtained their qualification there. There is a strict distinction between the job positions and the remuneration system which is based on seniority with the purpose the employees to be encouraged not to quit their job. Most of the internal labour markets can be found in the most monopolistic companies.

Internal market: A market for the European community’s states, which was established in 1992 and in which there is no barriers for trading and free economic mobility. Internal market also means the trade relationships between the separate divisions of a big company. The multinational corporations usually have such internal markets.

Investment climate: The economic and financial conditions in a country that affect whether individuals and businesses are willing to lend money and acquire a stake in the businesses operating there. Investment climate is affected by many factors, including: poverty, crime, infrastructure, workforce, national security, political instability, regime uncertainty, taxes, rule of law, property rights, government regulations, government transparency and government accountability.

International monetary system: Financial agreements between two sovereign countries. Usually these are agreements for fixing currency rates and for obligations settlements. Countries have the option to choose between the market mechanism for floating currency rates or to accept another order which is managed by an international body.

Incentive effect: The influence of the taxation over the supply of a certain kind of activity. The progressive taxation can have a stimulating effect if the individuals want the achieve a certain eventual income after paying their taxes and the only way to do that is to work more in a situation of an abrupt increase of the taxes.

Incentive pay scheme: A system for defining work remunerations which connects the result of the workers’ job with the company’s profit. For example the sellers very often get their basic payment as a commission of the number or the volume of their sales.

Intangible wealth: Intangible asset which is a source of income due to its legal rights or the trade reputation of its owner. Typical examples are the patents, the trademarks and the related to them rights, privileges and reputation.

Inertial effect: The passive acceptance by the government of economic condition inherited by the former government, for example agreement on the preliminary accepted increase in working remunerations.

Inheritance tax: A tax on the wealth which has been transferred after the death of the owner.