Contents

Draft Glossary

AccountsA generic term for statements setting out details of income and expenditure or assets and liabilities or both in a structured manner. Accounts may be categorised by the type of transactions they record e.g. revenue accounts, capital accounts or by the purpose they serve e.g. management accounts, final accounts, balance sheets.
ActualThe final amount of expenditure or income which is recorded in the Council's accounts.
Actuarial Gains and LossesFor a defined benefit pension scheme, the changes in actuarial deficits or surpluses that arise because:
(a) events have not coincided with the actuarial assumptions made for the last valuation (experience gains or losses); or
(b)the actuarial assumptions have changed.
AssetsResources controlled by the Council as a result of past events and from which future economic benefits or service potential is expected to flow to the Council.
Balance SheetA statement of the recorded assets, liabilities and other balances at a specific date at the end of an accounting period.
BudgetA statement of the Council's plans for net revenue and capital expenditure over a specified period of time.
Capital ExpenditureExpenditure on the acquisition of a fixed asset or expenditure which adds to and not merely maintains the value of an existing fixed asset.
Capital ReceiptsProceeds from the sale of fixed assets, repayments of grants or the realisation of certain investments. Capital receipts are available to finance other items of capital expenditure or to repay debt on assets originally financed from loan.
Collection FundThe fund into which are paid amounts of council tax and non- domestic rates and from which are met demands by this Council and the Greater London Authority and payments to the national non-domestic rates pool.
Community AssetsAssets that the Council intends to hold in perpetuity, that have no determinable finite useful life, and in addition may have restrictions on their disposal, e.g. parks and cemetery land.
Council TaxA local tax set by councils to help pay for local services. There is one bill per dwelling based on its relative value compared to others in the area. There are discounts, including where only one adult lives in the dwelling. Bills will also be reduced for properties with people on low incomes, for some people with disabilities and some other special cases.
Current Service Cost (Pensions)The increase in the present value of a defined scheme’s liabilities, expected to arise from employee service in the current period.
Deferred CreditsIncome still to be received (or applied in the accounts) where deferred payments (or application) have been allowed.
DepreciationThe measure of the cost or revalued amount of the benefits of the fixed asset that have been consumed during the period.
Events after the Balance Sheet dateThose events, favourable and unfavourable, that occur between the Balance Sheet date and the date when the Statement of Accounts is authorised for issue.
Exit PackagesCan include compulsory and voluntary redundancy costs, pension contributions in respect of added years, ex gratia payments and other departure costs.
Fair ValueIs the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Finance LeaseA lease that transfers substantially all of the risks and rewards of ownership of a fixed asset to the lessee.
General Fund (GF)The main revenue fund of the Council from which are made payments to provide services and into which receipts are paid, including the Council's share of council tax.
Heritage AssetsAssets with historical, artistic, scientific, technological, geophysical or environmental qualities that are held and maintained principally for its contribution to knowledge and culture.
ImpairmentA reduction in the value of a fixed asset below its carrying amount on the balance sheet.
Infrastructure AssetsInalienable assets, expenditure on which is only recoverable by continued use of the asset created, i.e. there is no prospect of sale or alternative use, e.g. coast protection works.
Investment AssetsThose assets that are held solely to earn rentals or for capital appreciation or both.
LeaseAn agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time.
LiabilitiesPresent obligations of a Council arising from past events, the settlement of which is expected to result in an outflow from the Council of resources embodying economic benefits or service potential.
Minimum Revenue ProvisionA prudent annual provision has to be made for the repayment of debt in accordance with Capital Finance Regulations.
Net Book ValueThe amount at which property, plant and equipment are included in the balance sheet i.e. their historical cost or fair value less the cumulative amounts provided for depreciation and impairment.
Net defined liabilityAlso known as the net pension liability.
Net Service ExpenditureComprises of all expenditure less all income, other than income from council tax and revenue support grant, in respect of a particular service.
Non-Current AssetAny asset which is not easily convertible to cash, or not expected to become cash within the next year.
Non-Domestic RatesBusinesses contribute to local government expenditure on the basis of a uniform rate, decided by the Government, levied on the rateable value of the business premises.
Non-Distributed CostsOverheads for which no user now benefits and should not be apportioned to services. Costs generally included under this heading are those arising from early retirement payments to the pension fund.
Non-specific Grant IncomeGrant that cannot be attributed to a specific revenue Service (e.g. New Homes Bonus).
Past Service CostThe increase in the present value of the pension scheme liabilities, related to employee service in prior periods arising in the current period as a result of the introduction of, or improvement to, retirement benefits.
PreceptThe demand on the collection fund by one authority (e.g. Greater London Authority) which is collected from the council tax payer by another (e.g. Bexley).
Prior Period AdjustmentsThose adjustments applicable to prior years arising from the correction of material errors.
ProvisionsAmounts set aside for liabilities of uncertain timing or amount that have been incurred.
Public Works Loans BoardA government agency which provides longer term loans to the public sector at interest rates only slightly higher than those at which the government itself can borrow.
RemunerationAll sums paid to or receivable by an employee and sums due by way of expenses allowances and the money value of any other benefits received other than in cash (excludes employer pension contributions).
ReservesThe general capital and revenue balances of the Council. There are two types of reserves which might be described as either available or not available to finance expenditure. Revenue reserves which result from monies being set aside or surpluses or delayed expenditure can be spent or earmarked at the discretion of the Council (e.g. General Fund). The capital receipts reserve is also available to the extent allowed for by statute. However, other capital reserves are not available to meet expenditure, e.g. the capital adjustment account.
Revenue ExpenditureThe day-to-day running costs of services including salaries, running expenses and capital charges.
Revenue Support GrantA general grant paid by the Government to help finance the cost of local government services.