Accruals
Definition of 'Accruals'Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. |
|
Investopedia explains 'Accruals'The use of accrual accounts has greatly increased the amount of information on accounting statements. Before the use of accruals only cash transactions were recorded on these statements. But cash transactions don't give information about other important business activities, such as revenue based on credit and future liabilities. By using accruals, a company can measure what it owes looking forward and what cash revenue it expects to receive. It also allows a company to show assets that do not have a cash value, such as goodwill. |
Related Definitions
Articles Of Interest
-
Operating Cash Flow: Better Than Net Income?
Differences between accrual accounting and cash flows show why net income is easier to manipulate. -
Intangible Assets Provide Real Value To Stocks
Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value. -
Advanced Financial Statement Analysis
Learn what it means to do your homework on a company's performance and reporting practices before investing. -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
Explaining Amortization In The Balance Sheet
Amortization is important to account for intangible assets. Read to find out more about amortization. -
Understanding Off-Balance Sheet Financing
For anyone who was invested in Enron, off-balance sheet (OBS) financing is a scary term. Off-balance sheet financing means a company does not include a liability on its balance sheet. It is ... -
Top 4 Most Competitive Financial Careers
If your goals include a big paycheck and working for a Wall Street firm, then you need to learn how to meet employers' expectations. -
A Day In The Life Of A Public Accountant
Here's an inside look at the workdays of two experienced CPAs, to give you an idea of what it might be like to pursue a career as a public accountant. -
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forward-looking expectations. -
Depreciation: Straight-Line Vs. Double-Declining Methods
Appreciate the different methods used to describe how book value is "used up".
Free Annual Reports