Accrue

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DEFINITION of 'Accrue'

The ability for something to accumulate over time. In finance, "accrue" is most commonly used when referring to interest, income and expenses of an individual or business. Interest in your savings account accrues so that over time the total amount in your account grows.

BREAKING DOWN 'Accrue'

In practice, the word "accrue" is often synonymous with the concept of accrual accounting, which has become the standard accounting practice for most companies. This form of accounting measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur, which gives a better picture of the company's financial health.

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RELATED FAQS
  1. How do I calculate compound interest using Excel?

    In simple terms, compound interest is interest on interest. It is the interest that accumulates on the principal deposit. ... Read Full Answer >>
  2. What is accrued interest, and why do I have to pay it when I buy a bond?

    A bond represents a debt obligation whereby the owner (the lender) receives compensation in the form of interest payments. ... Read Full Answer >>
  3. If different bond markets use different day-count conventions, how do I know which ...

    A day-count convention is a system used in the bond markets to determine the number of days between two coupon dates. This ... Read Full Answer >>
  4. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  5. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>
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