Glossary

Account: A financial record of cash movements, collecting specific types of outlays or inflows of financial resources.
Accounting basis: An accounting concept whereby expenditures, expenses and related liabilities are recognised in accounts and reported in financial statements. It relates exclusively to timing on either the cash or accrual method.
Accrual basis: A basis of accounting under which transactions and other events are recognised when they occur (and not only when cash or its equivalent is received or paid). Therefore, the transactions and events are recorded in the accounting records and recognised in the financial statements of the periods to which they relate.
Amortisation: A method of determining the annual costs associated with obligations for future outlays (e.g. the reduction of debt by regular payments sufficient to retire the debt by maturity).
By-product revenues: These are generated from the sale of marketable products created as a by-product of solid waste management, such as recyclables, compost, energy from waste, and landfill gas.
Capital outlay: An outlay of cash to acquire a resource that will be used in the development of the landfill over more than one year. Capital outlays (past, present, and future) must be converted into annual costs for full cost accounting purposes.
Cash flow accounting (also known as cash basis accounting): A basis of accounting that recognises transactions and other events when cash is received or paid. It measures financial results for a period as the difference between cash received and cash paid.
Contingent risk costs: Defined in this Guide as the costs of remediating unknown or future releases of pollutants (such as leaks from municipal landfills), as well as the liability costs of compensating for as yet undiscovered or future damage to the property or persons of parties who are affected adversely by municipal solid waste (MSW) activities.
Cost: The dollar value of resources used for the landfill.
Depreciation: The measure of consumption of the economic benefits embodied in an asset, whether arising from use, the passing of time or obsolescence.
Direct costs: Costs that are clearly and exclusively associated with the landfill and vary in proportion to volumes.
Discount rate: The rate of exchange between various time periods.
Environmental costs: In this Guide include environmental degradation that cannot be easily remedied or measured, is difficult to value, and is not subject to legal liability; these costs are often termed environmental 'externalities'.
Externality cost (or benefit): A cost or benefit that is borne by (or accrues to) society in general but which is not generally accounted for in a financial manner.
Fixed costs: Include interest, depreciation, and amortisation for past or future landfill capital outlays and other costs (e.g., security) that cannot be reduced quickly in response to lower waste disposal tonnage.
Full cost: Any real, definable and measurable cost, from any source, attributable to a particular landfill and incurred or likely to be incurred by the owner.
Full cost accounting: A systematic approach for identifying, summing and reporting the actual costs of solid waste management, taking into account past and future outlays, oversight and support service (overhead) costs, and operating costs.
Future outlay: An expenditure of cash in the future that is obligated by current or prior activities.
Hidden costs: As used in this Guide are the costs of activities or resources that appear to be free.
Indicative base cost of disposal (IBC): The base unit cost of disposal derived by the Full Cost Accounting (FCA) model; the IBC gives an indication of the actual dollar cost of providing residual waste disposal to a landfill.
Indirect costs: Costs that are not exclusively related to the landfill but that relate to more than one local government activity. Such indirect costs for solid waste management (and other local government activities) can include accounting and payroll, personnel, legal, purchasing, data processing, records management, and executive oversight (e.g. the mayor's salary and office expenses).
Integrated solid waste management: Incorporates several different approaches for handling the entire MSW stream. Using a combination of approaches allows each type of waste to be managed according to environmental and economic considerations, with priority going to source reduction, reuse, and recycling, while reserving landfills as the least desirable waste management method. See also Waste management hierarchy.
Net cost of a solid waste management activity or path: Its full cost minus its by-product revenues. The net cost divided by the tonnes of waste managed yields the net cost per tonne for that activity or path.
Net cost per ton: This is the best common denominator for comparing the current costs of solid waste management within or across local authority jurisdictions.
Net present value (NPV): The present value of cash inflows less the present value of cash outflows.
Operating costs: Regularly recurring costs of resources that are normally used immediately or over a relatively short period of time (i.e. within a reporting period) in order to support ongoing operations.
Opportunity cost: The value of the net benefit forgone on one investment through making an alternative investment.
Outlay: An expenditure of cash.
Overhead costs: The management and support costs of running the solid waste programme.
Present value (PV): The value today of a future payment, or series of payments, discounted at the appropriate discount rate.
Routine cash outlays: For solid waste management activities are the same as the operating costs of those activities.
Social costs: In this Guide are impacts on human beings, their property, and welfare that cannot be compensated through the legal system; also termed 'social externalities'.
Upfront costs: Reflect the initial investments and expenses necessary to start an MSW activity or path.
Weighted average cost of capital (WACC): Represents the return a landfill owner should expect from investment in a landfill. When used in this context, it is sometimes referred to as the 'opportunity cost of capital'. It represents what a landfill project should return in order for the landfill owner to adequately compensate its financial backers, regardless of whether they are debt holders or equity providers.
Variable costs: Of land disposal include costs of operation and maintenance and other costs that can be reduced quickly in response to lower waste disposal tonnage.
Waste management hierarchy: Emphasises a preferred order of management approaches: first, source reduction; second, recovery; third, waste combustion with energy recovery; and finally, landfilling.

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