Glossary
Cost reviews use a lot of specialist terms. This glossary explains them in plain words so you can read a lease, an invoice or a partner firm's report with confidence.
Each entry says what the term means, why it matters in a review and how it tends to show up.
Fairview Audit connects businesses with partner firms. The glossary explains terms. It is general information, not tax, accounting or legal advice.
How the glossary is sourced
Each entry is written in our own words. Before an entry is published, its definition is checked against published sources, and the entry lists those sources at the bottom so you can read them yourself. We quote only a few words at most from any source.
Where a term has a specific legal, tax or accounting meaning, the entry keeps to the general idea and marks anything specific for checking. Rules differ by place and change over time. A partner firm can tell you how a term applies to your case.
Leases and real estate
- Lease abstract: a short summary of the key terms of a lease.
- CAM reconciliation: the year-end comparison of common area charges billed with the costs actually incurred.
- Estoppel certificate: a signed statement that confirms the current terms and status of a lease.
- Escalation clause: a lease or contract term that allows a price or rent to increase under set conditions.
- Holdover rent: the rent charged when a tenant stays after the lease term ends.
- Pre-lease commencement analysis: a review of lease terms and costs before the lease begins.
- Early termination option: a right to end a lease before its stated end date.
Reviews and audits
- Baseline assessment: a starting picture of current costs and terms that later changes are measured against.
- Recovery audit: a review that looks for past overcharges and payments that should be refunded.
- Contract compliance analysis: a comparison of what a contract requires with what was billed and delivered.
- Contingency fee: a fee that depends on the outcome of the work.
- True-up: an adjustment that settles the difference between estimated and actual amounts.
Payables and spend
- Three-way match: a check that an order, a receipt and an invoice agree before payment.
- Duplicate payment: the same invoice paid more than once.
- Interchange fees: fees that make up part of the cost of accepting card payments.
- Accessorial charges: extra charges on a freight bill for services beyond basic transport.
Tax, standards and reporting
- Sales and use tax nexus: a connection to a place that can create a duty to collect or pay sales and use tax there.
- ASC 842: the accounting standard that governs how leases are reported.
- SOC report: an independent report on the controls of a service organization.
- Single audit: an audit for organizations that spend government grant funds above a set level. [VERIFY: current threshold and governing rule]
What each entry contains
Every entry follows the same pattern. It opens with a definition in two or three sentences. It then explains why the term matters in a cost review and gives an illustration in plain words, with no figures. After that it shows how the term appears in a review and lists common mistakes.
This pattern lets you scan for the part you need. If you only want the meaning, read the opening. If you are preparing documents, read the sections on how the term shows up and on common mistakes.
Using the glossary
Start with the entry closest to the document in front of you. Each entry ends with related terms and links to the matching services pages. If a term in your own paperwork is not listed, ask your partner firm to explain it during the first conversation.
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