Accrual Accounting

I. Formal Definition

A method of accounting in which revenue and expense are recognised when economic activity occurs rather than when cash is received or paid. Accrual accounting is required by both GAAP and IFRS for entities of any meaningful scale and is the federation default reporting basis. The federation requires accrual policies for major revenue and expense categories to be documented and consistently applied, with policy changes disclosed and the period-of-change effects quantified under UFMS-001:5.1. Cash-basis supplementary reporting is permitted but cannot substitute for accrual evidence.

II. Etymology

A standard term of double entry bookkeeping; the construction stabilised in seventeenth century Italian and Flemish merchant practice.

III. Federation Usage

Federation members report on the accrual basis with documented policies. Policy changes are disclosed and quantified in the period of change. Cash-basis supplementary views are permitted as supplementary information only under MEV-Annex:6.1.

IV. Related Terms

• cash-accounting
• double-entry
• gaap
• ifrs

V. Authoritative Citations

• UFMS-001:5.1UFMS Article V - Accrual Basis
• MEV-Annex:6.1MEV Annex VI - Accrual Reporting

VI. Citation in BibTeX

@misc{ifo4_glossary_accrual_accounting,
  title        = {{Accrual Accounting}},
  author       = {{IFO4 Federation Editorial Board}},
  howpublished = {{IFO4 Federation Glossary, slug \texttt{accrual-accounting}}},
  year         = {2026},
  url          = {https://ifo4.org/glossary/accrual-accounting},
  note         = {Category: Accounting; key: AccrualAccounting}
}

VII. Challenge This Definition

Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.