WIP, Coy, IWO – what does it all mean? Here’s a decoded list of the accounting lingo and jargon SMBs come up against every day.
Accountants often seem to abbreviate their thought process in their speech or written words, often leaving clients second guessing meanings. No more! – Have a look at the most common abbreviations and their usage.
WIP – Work in Progress (accounting for certain income flows over time, as the contract proceeds)
Depn – Depreciation (to deduct assets over their expected time frame, or rather the ATO’s time frame)
Coy – Company
Accts – Accounts
Adj Jrnl – Adjusting Journal (this type of journal is usually provided at the end of the job to allow your accounting software to align with your Financial Statements and Tax Return at year end)
IWO – Immediate write off (where an asset is immediately deductible as opposed to being depreciated over its expected time frame)
ATO – no explanation needed for the Government’s principal revenue collection agency.
A/R – Accounts receivable (those that owe money to you)
A/P – Accounts payable (those who you owe money to)
GIC – General interest charge (interest charge imposed by the ATO for late lodgement and/or penalties)
RBA and RBS – Running Balance Account or Running Balance Statement (ATO statements that provide a running balance of your BAS account)
Specific Taxes & Benefits:
FBT – Fringe Benefits Tax (A tax paid on certain benefits you provide to your employees or your employees’ associates)
FTB – Family Tax Benefit (Benefits looked after by the Family Assistance Office (not ATO!) to help families with child and other family expenses)
GST – Goods and Services Tax (no surprises here!)
LCT – Luxury Car Tax (a tax imposed on luxury vehicles over a certain threshold. Threshold of $57,466 for the 2011/12 financial year)
PAYGW – Pay as you go withholding (reporting of taxes you have withheld from your staff)
PAYGI – Pay as you go installment (a system for paying installments towards your expected income tax liability on your business and/or investment income for the current income year)
ETR – Education Tax Refund (an offset available to families in respect of certain educational materials for primary and secondary students)
ETO – Entrepreneurs’ Tax Offset (an offset available for small businesses that fall below certain income thresholds. Please note this offset is now family means tested)
HELP (formerly HECS) – A loan available to eligible students enrolled in Commonwealth supported places. A HECS-HELP loan will cover all or part of the student contribution amount. Compulsory repayments commence where your adjustable taxable income is above $47,196 in the 2011/12 financial year.
BAS – Business Activity Statement (the pink sheet that comes by every 3 months or annually to report your GST and/or FBT and/or PAYG requirements)
IAS – Installment Activity Statement (a pink sheet as well, but one that only reports your PAYG Installments)
ITR – Income Tax Return
Hopefully the above helps prevent you second guessing your next advisor’s email or letter.