Glossary

Accounting standardisation is a process aimed at standardising accounting practices. In Portugal, the Accounting Standardisation System for Public Administrations (SNC-AP) is an accounting standardisation tool for the public sector as it applies across the whole of public administration, based on a Conceptual Framework and Public Accounting Standards aligned with the International Public Sector Accounting Standards (IPSAS) and on accounting standardisation for small and micro public entities, provided for in Ordinance no. 218/2016, of 9 August.

The accounting transaction of consolidation consists in the elimination of intermediate monetary flows between entities of the General Government universe (in revenue and expenditure), in order to avoid the duplication of these values when calculating aggregate values. From 2017 onwards, flows related to transfers, interest and property income, subsidies, financial assets and liabilities, and acquisition and sale of current goods and services under the Health programme are excluded. By convention, in public accounting, until the end of 2013, consolidation differences were allocated to residual revenue and expenditure headings (other current/capital revenue/expenditure). From 2014 onwards, they were shown under their own heading, so as not to distort the value of the "Other income" and "Other expenses" headings.

The accounts payable are a subset of liabilities that are certain, liquid and due (e.g. invoice or equivalent document, vouchers, vouchers in accordance with the VAT Code). It corresponds to the debt due or falling due supported by an invoice or equivalent document or due as a result of a contract. Does not include invoices in the process of being received or checked, nor situations of litigation processes yet to be concluded.

This approach is done on an accruals basis, adding to the expenditure paid the commitments that have yet to be paid and removing the payments for commitments made in previous years.

Accrued interest is a concept used in national accounting that refers to interest accumulated over the accounting period. The recording of interest revenue and expenditure in national accounts includes the allocation of accrued interest corresponding to each moment in time. On the other hand, in cash accounting, interest income or expense is recorded at the time it is received or paid. Hence, the interest recorded may not have yet been paid, or may have been paid in full, but only the portion corresponding to the period in question is recorded in national accounts.

Activity rate is the share of the overall population that is part of the labour force. It is calculated as the ratio of the labour force divided by total population.

The concept of actual expenditure, used from the perspective of public budgetary accounting, corresponds to expenditure that alters net financial assets, therefore corresponding to the sum of the groupings of the economic classification of current and capital budgetary expenditure, excluding “financial assets” and “financial liabilities”.

Employers' actual social contributions are paid by employers to social security schemes and other employment related social insurance schemes to secure social benefits for their employees. As employers' actual social contributions are made for the benefit of their employees, their value is recorded as one of the components of compensation of employees together with wages and salaries in cash and in kind. The social contributions are then recorded as being paid by the employees as current transfers to the social security schemes, and other employment related social insurance schemes. Households' actual social contributions are social contributions payable on their own behalf by employees, self-employed or non-employed persons to social insurance schemes.

The additional payments on account is a CIT component whose payment is mandatory for companies that make payments on account and special payments on account and that paid the state surcharge in the previous fiscal year.

The adjusted appropriation corresponds to the resources available for use by the public services. It corresponds to the initial budgetary appropriation, deducted from captivations (conditional use of budgetary appropriations) and adjusted from budgetary amendments (reinforcements and/or reductions) that have occurred throughout the economic year.

The ‘adjustment period’ within the European economic governance framework  reform means the period over which the fiscal adjustment of a Member State takes place, covering a period of four years or, in the case of an extension, a period of four years plus an additional period of up to three years.

The amortization or reimbursement of public debt corresponds to the payment of the outstanding amount. The amortization can be total, if all the outstanding amount is repaid, or partial, if only part of the outstanding amount is paid.

The ‘annual progress report’ within the European economic governance framework  reform means a report of a Member State on the implementation of the national medium-term fiscal-structural plan, including the net expenditure path as set by the EU Council and the reforms and investments. 

Arrears are accounts payable that remain in this situation for more than 90 days after the due date agreed or specified in the invoice, contract, or equivalent documents.

Excluded from this concept, under the terms of the Law of Commitments and Late Payments (LCPA), approved by Law no. No. 8/2012, of 21 February: payment obligations subject to judicial challenge until a final and enforceable decision is rendered on them, which must be considered in liabilities, but not in "accounts payable", since provisions for risks and charges do not constitute a certain, net and payable liability; the situations of impossibility of compliance due to an act attributable to the creditor, which must be considered in "accounts payable", since the debt remains, even if it is not in arrears; the amounts subject to payment agreements provided that the payment is made within the agreed deadlines, which remain in "accounts payable", adding to the commitments of the period in which they will be liquidated.

The Assessed PIT corresponds to the amount of PIT due after applying the PIT tax rates to the taxable income of a certain taxpayer.

The purpose of the associations of parishes and municipalities with specific purposes is to pursue certain objectives of common interest to their members.

An audit is an examination or verification of a given matter, aimed at analysing its conformity with certain rules, standards or objectives, conducted by a person of good repute, technically prepared, carried out in compliance with certain generally accepted principles, methods and techniques, with a view to enabling the auditor to form an opinion and issue a ruling on the matter analysed. (in Tribunal de Contas, Manual de Auditoria e Procedimentos, 1999)

Automatic stabilizers are fiscal variables, both on the revenue and expenditure side, which react automatically to the economic cycle, mitigating its fluctuations. Thus, other things held constant, and without any discretionary changes in fiscal policy, the budget balance tends to improve in years of economic growth and worsen during recessions. For example, if unemployment rises, expenditure on unemployment benefits tends to increase and income tax revenues tend to decrease, minimizing the impact of the economic downturn.

Bodies with financial and administrative autonomy, financed mainly by transfers from other Public Administration units and by taxes assigned to them. Excluding the cases where this is a constitutional requirement, this regime can only be attributed to services that cumulatively comply with certain requirements: they do not have the nature and form of a public company, foundation or association; when it is justified for the adequate management (in particular the management of community funds); and when their own revenue reaches a minimum of two thirds of the total expenditure, excluding the expenditure co-financed by the European Union. Reclassified Public Entities are included in this subsector.

The Autonomous Funds and Services of the Regional Government include bodies with financial and administrative autonomy, financed mainly with transfers from other units of the Regional Administration and any taxes that may be assigned to them. They act in certain areas, either by regulating and supervising, or by granting financial support to economic agents within the framework of the economic and social policy of the respective Regional Government, within the scope of their economic territory.

The Autonomous Services of Local Government comprise the bodies with financial and administrative autonomy, financed mainly with transfers from other units of the Local Authorities and with local taxes and fees that may be assigned to them. They operate in certain economic and social areas within their economic territory.

The autonomous tax rate is a tax rate applicable to specific types of income (e.g., capital gains) that definitively withholds the amount of tax due by the taxpayer.

Available funds according to the Decree-Law no. 127/2012, of 21 June are the funds available in the very short term, which include, when applicable and provided they have not been committed or spent: a) Adjusted appropriation net of "cativos" (‘Captives or witholdings'),  of following three months; b) Transfers or subsidies from the State Budget for the following three months; c) Actual own revenue that has been collected or received as an advance; d) The forecast of actual own revenue to be collected in the following three months; e) Proceeds from loans taken out under the terms of the Law; f) Transfers not yet made resulting from programmes and projects under the National Strategic Reference Framework (NSRF) and other structural programmes whose invoices have been settled and duly certified or validated; g) Other amounts authorised under the terms of article 4 of the LCPA.