# Course Glossary Terminology differs across businesses, nonprofits, school districts, cooperatives, and governmental funds. Use the cooperative’s audited statements, chart of accounts, policies, contracts, and finance professionals to confirm local usage. ## Accrual accounting Records revenue when earned and expenses when incurred, even when cash moves at another time. ## Actual The amount or result that has occurred, compared with a budget, forecast, or standard. ## Amendment An authorized change to an existing agreement, usually required to be in writing. ## Asset A resource controlled by the organization that has present or future value. ## Audit right A contractual or legal right to inspect specified records or controls. ## Balance sheet A point-in-time statement of assets, liabilities, and equity or net position; also called a statement of financial position. ## BATNA Best alternative to a negotiated agreement—the course of action available if no deal is reached. ## Break-even The point at which relevant revenue equals relevant cost; in a cooperative, a planning tool rather than a profit-maximization goal. ## Budget An authorized financial plan for a defined period. ## Cash-flow statement A statement explaining cash changes from operating, investing, and financing activities. ## Cash reserve Liquid resources intentionally held for timing needs, shocks, or policy goals. ## Confidentiality A duty to protect specified nonpublic information from unauthorized use or disclosure. ## Contractor A person or organization providing services under contract rather than as an employee; classification depends on law and facts, not label alone. ## Cost allocation A method for assigning shared costs to districts, programs, funds, or services. ## Cure period Time allowed to correct a breach before specified remedies or termination. ## Current asset An asset expected to be used, converted to cash, or realized within the normal operating cycle or one year, depending on the reporting framework. ## Current liability An obligation expected to be settled within the normal operating cycle or one year, depending on the reporting framework. ## Cycle time Total elapsed time from the beginning to the end of a process. ## Dashboard A small set of decision-oriented indicators shown with definitions, targets, trends, explanations, and actions. ## Data security Administrative, technical, and physical safeguards that protect information from unauthorized access, change, loss, or disclosure. ## Decision right Authority to recommend, decide, execute, be consulted, or be informed about a decision. ## Deliverable A defined output a party or role must produce. ## Direct cost A cost that can be traced to a specific district, service, program, or other cost objective. ## Encumbrance A budgetary commitment that reserves capacity for an approved obligation such as a purchase order. ## Entire agreement A clause stating that the signed contract documents replace earlier discussions or representations about the deal. ## Equity In business reporting, assets minus liabilities; governmental and nonprofit reporting often uses net position or net assets instead. ## Expense The cost of resources consumed or obligations incurred during a period. ## Fixed cost A cost that does not change quickly with service volume within a relevant range. ## Force majeure A contract clause allocating consequences of specified extraordinary events outside a party’s reasonable control. ## Forecast Management’s current estimate of future results based on updated assumptions. ## Fully loaded employee cost Salary plus employer taxes, benefits, retirement, insurance, equipment, stipends, development, and other employer-paid costs. ## Fund balance The residual in a governmental fund, classified by the degree of constraint; it is not automatically the same as cash available to spend. ## Governing law The jurisdiction’s law selected to govern an agreement. ## Governance The system by which a governing body sets purpose, policy, authority, oversight, and accountability. ## Income statement A period statement of revenue and expense; analogous nonprofit or governmental statements may use different names. ## Indemnification A contractual allocation under which one party agrees to protect another from specified claims or losses; it requires legal and insurance review. ## Indirect cost A shared cost that supports more than one district, service, or program and must be allocated on a reasonable basis. ## Inherent risk Risk level before considering controls. ## Intellectual property Legally protected creations and rights such as copyrights, patents, trademarks, and trade secrets. ## Key performance indicator (KPI) A measure selected because it signals performance important to an objective or decision. ## Lagging indicator A measure of a result that has already occurred. ## Leading indicator A measure that may provide early warning or predict a later result. ## Liability A present obligation expected to require resources to settle. ## Limitation of liability A contract term that caps or excludes specified damages or exposure and requires qualified legal and insurance review. ## Material variance A difference large or important enough to affect understanding, decisions, or required action. ## Modified accrual A governmental fund accounting basis focused on current financial resources, with recognition rules that differ from full accrual. ## Net position The residual of assets and deferred outflows after liabilities and deferred inflows in governmental reporting. ## Notice provision A clause specifying the required method, address, and timing for formal contractual notices. ## Objective criterion A credible external or agreed standard used to evaluate options in a negotiation. ## Order of precedence A clause specifying which contract document controls if documents conflict. ## Process owner The person accountable for end-to-end performance of a repeatable process. ## RACI A responsibility map showing who is Responsible, Accountable, Consulted, and Informed. ## Receivable An amount owed to the organization but not yet collected. ## Records retention Rules and practices governing how long records are kept and how they are protected and disposed of. ## Reservation point The least favorable negotiation outcome acceptable before choosing the BATNA. ## Residual risk Risk remaining after controls are considered. ## Restricted resource A resource whose use is constrained by law, grantor, donor, agreement, or other authoritative condition. ## Revenue Resources earned or recognized under the applicable accounting basis; not always the same as cash received. ## Risk appetite The amount and type of risk an organization is willing to pursue or retain in seeking objectives. ## Risk register A structured record of risks, ratings, controls, owners, indicators, and actions. ## Scenario A coherent set of assumptions used to explore a materially different future condition. ## Scope of services The contract section defining included and excluded work. ## Service level A measurable standard for service performance, availability, response, or quality. ## Standard operating procedure (SOP) A documented routine describing purpose, roles, steps, controls, exceptions, and review. ## Step-fixed cost A cost stable within a range that increases when capacity crosses a threshold, such as adding another position. ## Subcontractor A third party engaged by a contractor to perform part of the work; approval, credentials, privacy, insurance, and accountability may apply. ## Termination for cause Contract termination based on a specified breach or failure. ## Termination for convenience Contract termination without breach, usually on stated notice and subject to wind-down terms. ## Unrestricted resource A resource not externally restricted to a specified purpose, though budgets, policy, governance, ethics, and public-purpose limits still apply. ## Variable cost A cost that changes with service volume or another activity driver. ## Variance The difference between a plan, standard, or forecast and an actual or revised amount. ## Venue The location or court in which disputes must be brought. ## Working capital Generally, current assets minus current liabilities; a short-term financial-capacity measure.