Glossary
Accounting Standards
Accounting Standards are defined statements of best practice issued by an authorising regulator body.
Accrued Expense
Accrued expenses are the effects of transactions and other events are recognised when they occur.
Accrued Holiday Pay
Accrued holiday pay is the payment calculated for holidays that have built up but not been taken, based on the amount of time worked.
Acid Test
The acid test is a calculation of current assets divided by current liabilities. An indicator of insolvency if it is less than 1.
Acquisition
An Acquisition is the purchase of one business by another.
Administration
An Administration is an insolvency process where the Administrator has the objective of rescuing the company and it this is not achievable, to recover as much as possible for the creditors.
Administrator
An Administrator is the Licensed Insolvency Practitioner, who has been appointed (by Court) to act for a company going into Administration.
All Monies Clause
An all monies clause is a clause in the terms and conditions, which would allow the supplier to get their product back if it was owed money.
Amortisation
Amortisation is the action of gradually writing off the initial cost of an asset – usually a lease or intellectual property.
Annulment
Relating to bankruptcy, annulment is the process of applying to court to return the bankrupt to their pre-bankrupt position.
Antecedent Transaction
Antecedent transactions are specific types of transaction that were made prior to a company’s insolvency. These are usually seen as being challengeable by an appointed Insolvency Practitioner.
Arrears
Arrears are monies that are owed and should have been paid.
Arrears of Wages
Arrears of wages are monies that should have been paid to an employee, but have not been paid.
Articles of Association
Articles of Association is a document that specifies the regulations for a company’s operations and defines the company’s purpose. It lays out how tasks are to be accomplished within the business and includes the process for appointing directors.
Asset
An asset is an item of property owned by a person or company, which is regarded as being available to use to meet debts and financial commitments.
Asset Based Lender
An asset based lender will lend to a person or business provided that there is an asset put up as security for payment.
Asset Freezing Order
An asset freezing order is a Court Order which prevents the disposal of assets by a respondent. Typically a freezing injunction is sought to preserve the defendant’s assets until judgment can be obtained or satisfied.
Associated Company
A company is associated with another company if one company has control or the other, or both companies are under the control of the same person or group of people.
Associates
People who are linked through a relationship with another from marriage, business or birth are associates. The full definition is Section 425 of the Insolvency Act 1986.
Auditor
An auditor is a person (or Firm) appointed to execute an audit of the company. They are required to have specified qualifications and must be regulated.
