Accounting Basis

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Accounting Basis

Any of several systems for recognizing revenue and expenses for accounting purposes. In the United States, the two main bases for accounting are cash accounting and accrual accounting. The cash accounting basis recognizes revenue and expenses in the order in which they are received or made. The accrual basis, on the other hand, matches revenue with the expenses that generated that revenue. Using a different accounting basis can have tax implications.
References in periodicals archive ?
which would entail a transition from cash basis of accounting to accrual basis of accounting.
with the cash basis of accounting in the financial statements.
Not surprisingly, an accrual basis of accounting was advocated for recording revenues and expenses.
Along with a new co-author, this edition includes an Excel tutorial; discussion of the new health care reform law and its financial issues, the International Financial Reporting Standards and their implications for health care management, fair value accounting, the difference between the cash and accrual basis of accounting, and the Sarbanes-Oxley Act and the COSO (Committee of Sponsoring Organizations of the Treadway Commission) Opinion; simplified discussion of the IRS' Modified Accelerated Cost Recovery System; updated examples; expanded questions and problems; and new charts, graphs, Excel templates, and web-based chapter questions and answers.
23 April 2013 -- US-based The Financial Accounting Standards Board said it has issued an accounting standards update that improves financial reporting by clarifying when and how public and private companies and not-for-profit organizations should prepare statements using the liquidation basis of accounting.
The modified cash basis comprises the cash basis of accounting supplemented with additional disclosure items," the minister said, while making reference to pages 27 of the two reports.
GAAP provides no guidance to financial-statement preparers on how to assess an entity's ability to continue as a going concern or on when it's appropriate to use one basis of accounting vs.
The statement specifically requires governments to measure most derivative instruments at fair value in their financial statements that are prepared using the economic resources measurement focus and the accrual basis of accounting.
Fitzgerald, is presented fairly, in all material respects, in conformity with the basis of accounting described in note 1 of the counsel's statement, which is principally the cash basis, a comprehensive basis of accounting other than U.
In addition, the cash basis IPSAS, Financial Reporting under the Cash Basis of Accounting, has been updated to include both required and encouraged disclosures that apply to entities that adopt the cash basis of financial reporting.
In recent years, the Financial Accounting Standards Board has issued several pronouncements requiring a fair value basis of accounting versus accounting at historical cost.
In financial statements prepared on the accrual basis of accounting, employers should recognize a liability and expense for voluntary termination benefits (for example, early-retirement incentives) when the offer is accepted and the amount can be estimated.