Accrual: Difference between revisions
imported>Doug Williamson (Add 2nd definition. Source: linked pages.) |
imported>Doug Williamson (Add links.) |
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This is the usual basis for commercial organisations and medium sized and larger not-for-profit organisations. | This is the usual basis for commercial organisations and medium sized and larger not-for-profit organisations. | ||
Indeed it is mandatory in most | Indeed it is mandatory in most financial reporting systems. | ||
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* [[Deferred income]] | * [[Deferred income]] | ||
* [[Defined benefit pension scheme]] | * [[Defined benefit pension scheme]] | ||
* [[Financial reporting]] | |||
* [[Income statement]] | * [[Income statement]] | ||
* [[Liabilities]] | * [[Liabilities]] | ||
* [[Not-for-profit]] | |||
* [[Prepayments]] | * [[Prepayments]] | ||
* [[Provision]] | * [[Provision]] | ||
Revision as of 09:53, 16 September 2020
1. Financial reporting.
An amount owing - but not yet invoiced - for:
- Services or goods received before the end of the accounting period; or
- Other economic benefits enjoyed before the end of the accounting period.
An accrual is a form of liability, because it represents cash that will have to be paid out in the future, for a benefit that has already been received.
Accruals may include estimates about the amounts of final future payments, or their likelihood, or both.
2. Financial reporting.
Any application of the accruals basis of financial reporting (also known as the matching basis).
This is the usual basis for commercial organisations and medium sized and larger not-for-profit organisations.
Indeed it is mandatory in most financial reporting systems.
3. Pensions.
In a defined benefit pension scheme, the build up over time of entitlement to future benefits, resulting from additional years of pensionable service.
