Definitions for "ENCUMBRANCES"
Contingent liabilities in the form of purchase orders, contracts, or salary commitments which are chargeable to an appropriation and for which a part of the appropriation is reserved. They cease to be encumbrances when paid or when the actual liability is recorded. In the CSU, the monthly financial statements produced by the Financial Accounting System use the term "Open Commitments" as the equivalent to encumbrances.
Obligations in the form of purchase orders, contracts, or salary commitments which are chargeable to an award and for which a part of the awarded amount is reserved. They cease to be encumbrances when paid.
Commitments related to unperformed (executory) contracts for goods or services. Used in budgeting, encumbrances are not GAAP expenditures or liabilities, but represent the estimated amount of expenditures ultimately to result if unperformed contracts in process are completed.
A lien or any form of indebtedness owed against real or personal property. An encumbrance is also recognized an unearned equity.
Those charges or the security that attaches to any kind of property. For example, if there is a mortgage on a piece of property, then the property is said to be encumbered by that mortgage.
Debts (e.g., taxes, liens) and loans (e.g., mortgages, deeds of trust, security interests) which use property as collateral for payment of the debt or loan are considered to encumber the property because they must be paid off before title to the property can pass from one owner to the next. Generally, the value of a person's ownership in a property (called the "equity") is measured by the market value of the property less the total of all encumbrances.
Keywords:  diminish, claim, unpaid, may, property
Any claim against a property that may diminish its value.
A claim against the property in which there may be unpaid debts, taxes, etc.
A specific amount of funds that has been set aside in an account for the receipt of an order or the payment of an invoice. Encumbrances reduce the available balance of an account.