accrual

(redirected from Accrued benefit)
Also found in: Dictionary, Thesaurus, Medical, Legal.
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 ?
Under this alternative rule, the portion of the participant's accrued benefit, expressed in the normal form of benefit under the plan and commencing at normal retirement age (or at the current date, if later), that is not settled by the single-sum payment must be no less than the excess of: (1) The participant's total accrued benefit expressed in that form; over (2) the annuity payable in that form that is actuarially equivalent to the single-sum payment, determined using the applicable interest rate and the applicable mortality table.
The pension obligation less the actuarial value of assets equals the unfunded accrued benefit obligation.
An employee who has completed at least three years of service must have a nonforfeitable right to at least the following percentages of his accrued benefit derived from employer contributions: 20% after three years of service, 40% after four years of service, 60% after five years of service, 80% after six years of service, and 100% after seven years of service.
4) Generally, any plan amendment that has the effect of reducing a participant's accrued benefit under the plan is prohibited.
GASB standards currently allow six methods, reflecting a variety of funding approaches, whereas private-sector standards mandate the use of a single approach that is closely related to the employer's unfunded accrued benefit obligation.
The PPA establishes new funding requirements and limits benefit accruals for certain plans deemed "at risk," which means the accrued benefits under the plan are less than 80 percent funded based on the prior year's assets.
A plan will be at risk if the accrued benefits under the plan are less than 80 percent funded based on the prior year's assets.
Replacing a traditional defined-benefit pension plan with a cash-balance plan raises a number of complicated and unsettled legal issues under the Internal Revenue Code (IRC), the Employee Retirement Income Security Act of 1974 (ERISA), and the Age Discrimination in Employment Act (ADEA) These legal issues fall into four primary categories: (1) protection of accrued benefits, (2) rate of benefit accrual, (3) age discrimination, and (4) notice requirements.
The Boyett ruling equates the plan's accrued benefit with the amount of retirement benefit that is earned on the cutoff date.
Accrued benefit, the holder must take a sample of each tissue and document.
Mass Mutual hopes that the winding road of plan termination for advisors and sponsors will be made be more navigable by services such as: consultation for amending plan documents; assistance with interim investment philosophy; data management; final accrued benefit calculations; preparation of reports for filing with the government; participant communication; lump sum payments to participants; participant distribution education assistance; customized benefit election kits and registered retirement specialists available through their Participant Information Center.