Glossary of Fund Accounting Terms

A liability on the balance sheet that represents the money owed for goods or services purchased on credit.

Accounting method in which income and expenses are recognized as they are earned or incurred – before they are received or paid.

The aggregate method is an alternative to performing a layering calculation for allocating realized gains for tax purposes. When realized gains are generated, rather than performing a detailed analysis of the historic results security by security, the gains for all the securities are totaled (or aggregated) and allocated.

Proportionate share of the investment partnership's net income (revenues – expenses) attributed to a given partner. Allocations are usually based on the partner's pro rata share of the fund for book purposes.

An investment that is not one of the 3 traditional asset types (stocks, bonds, cash). Due to their complexity and relatively lack of liquidity, most alternative investments are restricted to insititutional investors or qualified high-net-worth individuals.

A transfer of ownership from one investor to another.