Treasury management strategy report 2016-17

Annex D: treasury management glossary of terms

Basis points

There are 100 basis points to 1%.


'Credit default swap' is an additional assessment of credit worthiness by providing a risk analysis of changes in credit quality as perceived by the market.


The Chartered Institute of Public Finance and Accountancy, is the professional body for accountants working in local government and other public sector organisations.


An institution with whom a borrowing or investment transaction is made.

Credit rating

This is an opinion on the credit-worthiness of an institution, based on judgements about the future status of that institution. The main rating agencies are Fitch, Standard and Poor's and Moody's.


Department for Communities and Local Government.


The measure of the cost or revalued amount of the benefits of the fixed asset that have been consumed during the period. Consumption includes wearing out, using up or other reduction in the useful life of a fixed asset whether arising from use, time or obsolescence through either changes in technology or demand for the goods and services produced by the asset.


The DMADF is the 'debt management account deposit facility' which is a highly secure fixed term deposit account with the Debt Management Office, part of Her Majesty's Treasury.

Forward commitments

Agreeing in advance to place an investment with a borrower at a future specified date at an agreed interest rate.


The name given to bonds issued by the UK government. Gilts are issued bearing interest at a specified rate, however, they are traded on the markets like shares and their value rises of falls accordingly. The 'yield' on a gilt is the interest paid divided by the market value of that gilt.

IFRS (international financial reporting standards)

International accounting standards that govern the treatment and reporting of income and expenditure in an organisation's
accounts, which came fully into effect from 1 April 2010.

Impairment charges

A reduction in the value of a fixed asset below its carrying amount on the balance sheet.

Intangible assets

Non-financial fixed assets that do not have physical substance but are identifiable and are controlled by us through custody or legal rights. Specifically purchased software licenses are included in this category of asset.

iTraxx benchmark

iTraxx is the name of a credit default swap index used to inform credit risks. Credit default swap indexes are benchmarks for protecting investors against default, and traders use them to speculate on changes in credit quality.


A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset.


This relates to the amount of readily available or short term investment money which can be used for either day to day or unforeseen expenses. For example call accounts allow instant daily access to invested funds.

Money market funds (MMF)

Money market funds are investment funds that are invested by a fund manager in a wide range of money market instruments. MMF's are monitored by the official ratings agencies and due to many requirements that need to be fulfilled. The funds usually receive the highest quality rating (AAA) so provide minimal risk. They are very flexible and can be withdrawn in the same way as any other call deposit.


The minimum revenue provision represents the revenue charge for the repayment of debt.


The Public Works Loan Board is a statutory board that is run within the UK Debt Management Office (DMO). Its function is to lend money to local authorities and other prescribed bodies.

Section 151 officer

This is a legal requirement that councils must appoint a named accountant to give them financial advice. The accountant in question is usually a chief finance officer, director of finance or treasurer.

Supranational bonds

Bonds issued by institutions such as the European Investment Bank.