Accrual and Deferral

The assignment of an organization’s receipts and expenditure to particular periods, for purposes of calculating the net income for a specific period.

A distinction is made between:

Accruals – An accrual is any expenditure before the closing key date that represents an expense for any period after this date.

Deferrals – Deferred income is any receipts before the closing key date that represent revenue for any period after this date.

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