accrual

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Related to Accrued benefit: Accrued Benefit Cost Method

Accrual Accounting

A system of accounting that recognizes revenue and matches it with the expenses that generated that revenue. Unlike other systems of accounting, which recognize revenue and expenses in the order in which they are received, the accrual accounting convention ignores the function of time and only considers what expenses generate what revenues, even if payments have not actually been made. Companies with inventories are required to use the accrual method for tax purposes.

accrual

an expense which is outstanding at the end of a trading period and which needs to be included in the accounting results for the period. For example, an unpaid INVOICE for car repairs would be included in the expenses of the trading period in calculating profits, since the repair costs relate to that period; the unpaid bill is counted as a liability of the firm at the period end, and afterwards until it is paid, and is added to CURRENT LIABILITIES in the firm's BALANCE SHEET. See PREPAYMENT.
References in periodicals archive ?
source income, became participants and accrued benefits under the plan.
The Company measures its accrued benefit obligations and the fair value of plan assets for accounting purposes as of December 31 of each year.
59) For example, if a HCE reveives accrued benefits from a defined benefit plan at an accrual rate of 1.
In situations where the employer-provided portion of the accrued benefit (before addition of the benefit derived from the purchase of service credits) is less than the age-reduced 415(b) dollar limit, the 415(b) test would be met, even if the addition of the accrued benefit derived from the purchase of service credits makes the total accrued benefit greater than the age-reduced dollar limit.
As a result, in the year a participant's interest vested, the participant was required to include in gross income the value of the vested accrued benefit.
In Tomlinson, the plaintiffs argued that the plan violated the ERISA requirement that the amount a participant accrues in any given year should be no more than 133 1/3 percent of the annual rate at which he accrued benefits in the previous year.
However, the court pointed out, because his nonforfeitable accrued benefit under the plan was less than $50,000, the section 72(p)(2)(A)(ii) amount of one-half that accrued benefit amount applied.
Current GASB standards include such factors in the calculation of the employer's unfunded accrued benefit obligation for benefits already earned.
For cash balance or hybrid plans, the accrued benefit may be expressed as an annuity payable at retirement age, the balance of a hypothetical account, or the current value of the cumulative percentage of the employee's final compensation.
Most importantly, for cash balance or hybrid plans, the accrued benefit may be expressed as an annuity payable at retirement age, the balance of a hypothetical account, or the current value of the cumulative percentage of the employee's final compensation.
said Tuesday its group net and pretax profits rose for the third consecutive year in fiscal 2004, due partly to a decrease in accrued benefit costs and good performance in its feed and distribution businesses.