Glossary

IAS

IAS is the abbreviation for International Accounting Standards (see also International Accounting Standards), which is a set of rules for the worldwide harmonisation of accounting and financial reporting.

ICC Arbitration

ICC Arbitration is an institutionally administered arbitration procedure of the International Chamber of Commerce (ICC). The ICC provides arbitration rules that determine the details of the arbitration procedure.

IFRS

IFRS is the abbreviation for International Financial Reporting Standards (see also International Financial Reporting Standards). These are standards for accounting and financial reporting.

IM

The term IM is the abbreviation for Information Memorandum (see also Information Memorandum). This is a written summary of information about a company that is up for sale.

Inceditor Agreement

The Inceditor Agreement is a contract that regulates the relationship between the lenders and determines the priority of their claims against the borrower in the case of financing with several lenders.

Incentive

The English term "incentive" refers to a bonus that is often used to motivate employees or management. Examples of an incentive are cash benefits such as a bonus or benefits in kind such as a company car.

Increased Cost Clause

Lending banks use an increased cost clause to protect themselves against cost increases. By agreeing an increased cost clause, the borrower is obliged to compensate for the increased costs.

Incubator

An incubator is an organisation (often public funding agencies, universities or industry associations) that provides start-ups with premises and consulting services.  

Indebtedness

Indebtness is the term for debt in general and the indebtedness of a company in particular.

Indemnity

The term indemnity refers to a contractual agreement in which one contracting party undertakes to pay for the potential damages or losses of the other person, as is customary in insurance business, for example.

Indicative Bid

An Indicative Bid (Synonym Indicative Offer) refers to a first, still non-binding offer, which an interested buyer submits for the target company within the framework of an auction procedure (auction).

Indicative Offer

An indicative offer (synonym Indicative Bid) refers to a first, still non-binding offer, which an interested buyer makes for the target company in the course of an auction procedure (auction).

Information Covenants

Information covernants (or information undertakings) are clauses in a loan agreement that oblige the borrower to regularly inform the lending bank about certain facts.

Information Memorandum

The Information Memorandum (IM) is a written compilation of information about a company up for sale, which the seller prepares or has prepared before the start of an auction. In practice, the Information Memorandum is used as the basis for the Indicative Bid (see also Indicative Bid).

Information Undertakings

Information Undertakings (or Information Covenants) are clauses in a loan agreement that require the borrower to regularly inform the lending bank about certain facts.

In Good Faith

This term is used to describe sincere and honest business behavior

Initial Public Offering

The Initial Public Offering (IPO) is the English term for the initial public offering of a company (going public). With an Initial Public Offering, the company receives new capital and the former owners are enabled to sell their shares in the company at a profit.

Insider

Insiders are persons who have access to information about a listed company that is not publicly known.

Insider trading

Insider trading or insider trading is a process in which a person uses information unknown to the public to enrich himself or herself in the course of his or her own securities transactions. Insider trading is punishable by law.

Insourcing

Insourcing (alternative terms are backsourcing and restocking) describes the opposite process of outsourcing, in which processes and functions are integrated into a company. For example, insourcing is a means of reducing dependency on external suppliers, thereby increasing production quality and improving planning.

Institutional Investor

An institutional investor is a pure capital investor (such as venture capital funds, asset management or private equity funds) who tries to invest his capital in companies as profitably as possible. This is in contrast to a strategic investor (see Strategic Investor), who pursues strategic as well as financial interests.

Intangible assets

Intangible assets (also called intangibles for short) are immaterial assets such as investments or industrial property rights (intellectual property). The counterpart of Intangible Assets are Tangible Assets.

Intellectual Property

Intellectual property (IP) comprises all types of industrial property rights such as utility models, patents, design patents, trademarks, copyrights, rights to a name, software rights and similar property rights.

Intercreditor agreement

An agreement which, in the case of financing with several lenders, regulates the relationship between the lenders and determines the priority of their claims against the borrower is known as an intercreditor agreement.

Interest margin

The interest margin is the interest premium that the lender receives on the refinancing interest rate.

Internal rate of return

The internal rate of return (IRR) is the internal rate of return used to calculate the return on an investment. This is a discount rate that is applied to the cash flows expected from the investment so that the net present value of the investment is zero.

International Accounting Standards

The International Accounting Standards (abbreviated as IAS) are a set of rules for the worldwide harmonisation of accounting and financial reporting. The Accounting Standards Committee (IASC) published them between 1973 and 2001. The existing standards are still valid.

International Financial Reporting Standards

The International Financial Reporting Standards (IFRS for short) are standards for accounting and financial reporting that have been issued by the International Accounting Standards Committee (IASC) since 2001. Capital market-oriented companies with their headquarters in the EU generally prepare their consolidated annual financial statements in accordance with IFRS, as the European Union has decided to adopt the International Financial Reporting Standards.

International Securities Identification

The International Securities Identification (also known as ISIN in the short form) is a twelve-digit letter-number combination for the unique identification of securities of all kinds.

Investment Committee

The investment committee of a company advises the management on all issues relating to investment transactions, investment policy and business expansion. In a stock corporation (AG), this committee is usually composed of members of the supervisory board.

Investment Grade

Investment grade is an assessment of the creditworthiness of a debtor. It corresponds to a credit rating of at least "BBB" or "Baa3" and is therefore considered "(not yet) speculative".

Investment manager

A position in a private equity or venture capital company is the investment manager. He is responsible for identifying and managing investments.

Investment Bank

An investment bank is a bank that specializes in advising clients on mergers and acquisitions, IPOs and other capital market transactions.

Investor relations

The term investor relations refers to the communication of a listed company with its future or current investors.

IPO

The IPO is the abbreviated form of the term Initial Public Offering. This refers to the initial public offering of a company (going public). With an Initial Public Offering, the company receives new capital and the former owners are enabled to sell their shares in the company at a profit.

IRR

The IRR is the abbreviation for Internal Rate of Return, which is the internal rate of return used to calculate the return on an investment. In concrete terms, it describes a discount rate that is applied to the cash flows expected from the investment so that the net present value of the investment is zero.

ISIN

The ISIN (or, in its written form, the "International Securities Identification Number") is a twelve-digit letter-number combination for the unique identification of securities of all kinds.

Issuer

An issuer is an issuer of securities.