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OBLIGATIONS
Technically defined as "amount of orders placed, contracts awarded, services received, and similar transactions during a given period which will require payments during the same or a future period."
OPERATING INCOME
A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes. Also called operating profit or EBIT (earnings before interest and taxes.)
OPERATING LEASE
A lease which is treated as a true lease (as opposed to a loan) for book accounting purposes. As defined in FASB 13, an operating lease must have all of the following characteristics:
• lease term is less than 75% of estimated economic life of the equipment
• present value of lease payments is less than 90% of the equipment's fair market value
• lease cannot contain a bargain purchase option (i.e., less than the fair market value)
• ownership is retained by the lessor during and after the lease term
An operating lease is accounted for by the lessee without showing an asset (for the equipment) or a liability (for the lease payment obligations) on it's balance sheet. Periodic payments are accounted for by the lessee as operating expenses of the period.
ORDINARY INTEREST
Simple interest based on a year of 360 days, contrasting with exact interest having a base year of 365 days.
OSDBU (Office of Small and Disadvantaged Business Utilization)
These offices offer small business information on procurement opportunities, guidance on procurement procedures, and identification of both prime and subcontracting opportunities with the United States Government.
OUTLAYS
Net disbursements (cash payments in excess of cash receipts) for administrative expenses and for loans and related costs and expenses (e.g., gross disbursements for loans and expenses minus loan repayments, interest and fee income collected, and reimbursements received for services performed for other agencies).
OVERHEAD
Business expenses not directly related to a particular good or service produced. An example would be rent.
OWNER BENEFIT
The cash flow available to the Owner after deducting the cost of sales and necessary operating expenses from gross sales and before deducting for interest and taxes. It is a combined estimate of business net income, compensation to the owner, fringe benefits, interest and depreciation expense.
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