Sounding much like what it actually means, the acronym simply stands for the phrase, “I owe you”, an informal document that details and acknowledges the accumulation of debt one party owes another party.
The debt specified within the document is usually monetary in nature. However it is not necessarily confined to such as the debt may also come in the form of goods like tangible products or properties.
Given the informal nature of the IOU, such a document may carry with it uncertainty. It is vastly different from bonds and promissory notes and are not legally negotiable.