Financial and Economic Dictionary

Working Capital

The capital or funds available for a business's day-to- day operations, calculated as current assets minus current liabilities.

Capital Expenditure

Net Income

The total earnings of a business or individual after deducting expenses, taxes, and other costs.

Fiscal Sustainability

The state's ability to meet its financial obligations and provide sufficient resources to fulfill those commitments when they come due, which is achieved through sound policies aimed at diversifying revenues, improving expenditure efficiency, and controlling the budget deficit to reduce the levels of increase in public debt and its burdens.

Budgeting

Estimates of the expected revenues and expenditures over a specific financial period (usually a fiscal year), and the government’s plans for allocating resources to various sectors.

Budget

The actual amounts allocated or spent based on the estimates outlined in the general budget. The public accounts reflect the actual financial status after the execution of the plans and goals defined in the budget, and they are monitored periodically to ensure they align with the expectations.

Expenses

What the government spends on various sectors, such as education and health, for development and improving citizens' standard of living. Expenditures are divided into operating expenses and capital expenditures.

Framework Agreement

A formal agreement between two or more organizations of the government bodies with suppliers or contractors which contains conditions and regulations of the contract.

Financial Impact

The estimated or realized value of the costs, reflecting the change in the financial position of the entity in terms of expenses, revenues, or financial efficiency.

Repurchase Agreement

A financial transaction where one party sells securities to another with an agreement to repurchase them at a specified future date and price, often used in short-term funding.

Revenues

The total revenues collected by the government from both oil and non-oil revenues. This includes revenues from oil production and sales, taxes and duties on goods and services, as well as returns on assets.

Finance

Financial resources provided for business operations, projects, or investments.

Inflation Rate

The percentage change in the price level of goods and services over a specified period.

Gross Domestic Product (GDP)

The total value of goods and services produced within a country during a specific period of time.

Capital Expenditures

The total amount spent by the government on infrastructure development projects and the acquisition of fixed assets such as construction, equipment, and real estate for the purpose of economic and social development.

Debt Securities

A loan, debt or any other financial instrument issued by companies or governments resulting in interest or similar payments to the holder of the debt security until the maturity date and repayment of the principal – the face value of the debt security at the maturity date made by the issuer. Debt securities, including the entitlement to interest benefits, can be traded. There are many forms of debt securities, such as corporate bonds, government bonds, collateralized bonds, certificates of deposit and debenture.

Zero-Based Budgeting (ZBB)

A budgeting method where expenses must be justified from zero rather than being based on previous budgets.

Market Value

The price an asset gets in a marketplace.

Asset Management

The process of managing investments and assets for beneficiaries with the aim of increasing returns while managing risks.

Depreciation

The systematic allocation of the depreciable amount of a fixed asset over its useful life. It is used in accounting to distribute the cost of an asset over the years it is expected to be in use.

Costs of Contracts on Etimad

Total amount of contract costs, that is registered at Etimad, (the original contract cost will be according to the cost of the new contracts) the remaining value of contract costs would be when these contracts registered at Etimad (for the existing contracts).

Spending Efficiency

Maximizing impact relative to expenditure, by making optimal use of available resources and addressing various types of waste without compromising the quality of services provided.

Unified Procurement Framework Agreement

A formal agreement between one or more government entities and one or more suppliers, contractors, or service providers, containing the terms and conditions of contracts to be awarded during a specified period, covering all participating government entities to achieve economies of scale and reduce costs and procedures, and where any supplier, contractor, or service provider may request to join at any time during the term of the agreement.

Liquidity

The ease and speed with which an asset or security can be converted into cash without a significant loss of value.

Government Tenders and Procurement Law

The system that regulates how government entities conduct tenders and procure goods, services, and projects, ensuring transparency, efficiency, and the best possible value for public funds.

Bank Credit

Entire amount of money that a person or corporation may acquire from a financial institution such as a bank.

Budget Supplement

An additional amount added to the approved budget of an entity in accordance with regulatory instruments.

Leverage Ratio

A financial metric that compares a company’s debt to its equity or assets, showing the level of financial risk.

Accrual Basis of Accounting

A basis of accounting under which transactions and other events are recognized when they occur (and not only when cash or its equivalent is received or paid). Therefore, the transactions and events are recorded in the accounting records and recognized in the financial statements of the periods to which they relate. The elements recognized under accrual accounting are assets, liabilities, net assets/equity, revenue, and expenses.

Fund Management Fee

The remuneration, expenses, and fees in relation to advisory services paid to the fund manager.

Budget Deficit as a Percentage of Gross Domestic Product (GDP)

A measure used to assess the government's fiscal deficit in relation to the size of its economy based on nominal Gross Domestic Product (GDP), which is calculated using current prices (i.e., the prices prevailing in the same year without adjusting for inflation).

Debtor

Every person of a moral or legal identity owing in debt property for the government.

Credit Default Swap (CDS)

A financial derivative that transfers credit risk between two parties, often used as insurance against default.

Real Gross Domestic Product (GDP)

The value of Gross Domestic Product at constant prices according to the base year.

Employees Compensations

Cash or in-kind bonus that is due to be paid for an employee for his work in addition to wages, salaries, which include social insurance paid by a government unit on behalf of its workers excluding any compensation for workers related to capitals for self-account.

Inflation

The sustained increase in the general price level of goods and services in an economy, leading to a decrease in purchasing power.

Revolving Credit

A type of credit arrangement that allows a borrower to access funds up to a predetermined credit limit, with the ability to borrow, repay, and borrow again.

Credit and Debit Notes

Commercial documents issued by a supplier or seller to a buyer, required by law to evidence a subsequent change to consideration of a Taxable Supply weather reducing its value (credit note) or increase it (debit note).

Assets

Resources controlled by an entity as a result of past events and from which future economic benefits or service potential are expected to flow to the entity.

Expenditure Rationalization

Policies aimed at optimizing government spending, cutting unnecessary expenses, and improving efficiency in public finances.