Assets, such as land or property, which cannot be changed or moved.

Implicit cost

Relates to the foregone benefits of any single transaction, for example, the implicit cost of taking a holiday is the wages that would have been earned if the individual had worked instead.

Imprest system

Maintaining a constant cash float. The system ensures greater control over cash expenses as documentation must be made to calculate the balance required for reimbursement. The system is therefore far easier to reconcile.

Inflation accounting

A method of accounting designed to correct problems arising from historical cost accounting in the presence of inflation.

Inflation tax

The hidden cost incurred due to effects of inflation on the value cash balances.

Inheritance tax

Tax levied on the transfer of an individuals estate on his/her death to non-exempt beneficiaries, subject to a nil rate band.


Occurs when an individual or company has insufficient funds to settle debts when they become payable.

Intangible Assets

Assets without physical substance controlled by an entity which provide expected future economic benefits, e.g. goodwill, patents, trademarks and copyrights.

Interbank rate

Rate that banks charge each other for loans for periods between one day and several years.

Interest bearing

Term describing securities paying a specified rate of interest in one or a series of payments over its life.

Interest cover

It is calculated by dividing operating profits by net interest payments and compares the interest paid on borrowings, net of interest bearing deposits, with its operating profit, e.g. a low figure means profits are more exposed to rises in the cost of borrowing.

Interest payable

Amount a company pays in the form of interest, e.g. on cash borrowings.

Interest rate futures

Futures contracts traded on fixed income securities based on the levels of official interest rates.

Interest rate swap

Arrangement in which two parties agree to exchange interest rate flows at agreed intervals over an agreed period, but without any principal being paid.

Interest receivable

Amount of income a company receives in the form of interest payments, e.g. on cash.

Interim dividend

The dividend declared part-way through the financial year, before annual earnings are established.


An agent, broker or financial institution that can give advice and act as a middle person between one individual/organisation and another.

Internal rate of return

The interest rate which, when used as the discount rate for a series of cash flows, gives a net present value of zero.


The process of determining a figure or rate that lies between other known data.


A company’s finished goods, work in progress and raw materials.

Investment income

Income, paid from an investment, such as dividends and interest.

IP (Intellectual Property)

Treatment of certain intangible products similarly to physical assets, with the majority of countries granting certain rights, under IP laws, over these intangibles.

IPO (Initial Public Offering)

The first offering of a company’s shares to the public.

ISA (Individual Saving Account)

A financial product designed for the purpose of investment and savings offering favourable tax status.

ISC (Issued share capital)

Amount of authorised share capital in a company that shareholders have subscribed to own.

Issue price

Price at which a company’s shares are offered to the market for the first time.