Glossary · 10 terms
Accounting
All accounting terms in the EquitiesIndia.com glossary — plain-English definitions written for Indian retail investors.
Amortisation(Amortization)
Amortisation is the systematic write-off of the cost of an intangible asset over its useful economic life, analogous to depreciation for tangible assets.
Auditor Report(Statutory Audit Report)
The auditor's report is the independent statutory auditor's opinion on whether a company's financial statements present a true and fair view of its financial position and performance, in accordance with applicable accounting standards.
Balance Sheet(Statement of Financial Position)
A balance sheet is a financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of what the company owns, owes, and the residual interest of its owners.
Cash Flow Statement(Statement of Cash Flows)
The cash flow statement reports all actual cash inflows and outflows during a period, categorised into operating, investing, and financing activities, reconciling the opening and closing cash balances.
Contingent Liability(Off-Balance Sheet Obligation)
A contingent liability is a potential obligation that may arise depending on the outcome of a future event — such as a court case or tax dispute — which is disclosed in the notes to financial statements rather than recorded on the balance sheet.
Depreciation(D&A)
Depreciation is the systematic allocation of the cost of a tangible fixed asset over its useful life, reflecting the gradual consumption of the asset's economic value through use, obsolescence, or passage of time.
Goodwill(Acquisition Goodwill)
Goodwill is an intangible asset representing the excess of the purchase price paid in an acquisition over the fair value of the identifiable net assets acquired, capturing the brand, customer relationships, and synergies of the acquired business.
Income Statement(P&L Statement)
The income statement (also called the profit and loss statement or P&L) summarises a company's revenues, costs, and profits over a specific accounting period, showing how much money was earned and spent.
Related Party Transactions(RPT)
Related Party Transactions (RPTs) are business dealings between a company and parties that have a pre-existing relationship with it — such as promoters, subsidiaries, directors, or key managerial personnel — which must be disclosed and, in certain cases, approved by independent shareholders.
Reserves and Surplus(Retained Earnings)
Reserves and Surplus represents the accumulated retained earnings and other reserves held by a company as part of shareholders' equity, reflecting profits not distributed as dividends and capital receipts set aside for specific or general purposes.