accrualkirjanpidon

Accrualkirjanpito, known in English as accrual accounting, is an accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid. This contrasts with cash basis accounting, where transactions are recorded only when cash changes hands.

Under accrual accounting, revenue is recognized when a product or service has been delivered to a customer and the business has a reasonable expectation of receiving payment, even if the invoice hasn't been paid yet. Expenses are recognized when they have been incurred and the business has received a benefit, even if the payment is due at a later date. For example, if a company receives a utility bill for services rendered in December but pays it in January, the expense is recorded in December under accrual accounting.

The primary benefit of accrual accounting is that it provides a more accurate picture of a company's financial performance and position over a specific period. It aligns revenues with the expenses incurred to generate those revenues, offering a better understanding of profitability. This method is required by generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) for most businesses. Accrual accounting is essential for financial reporting, investment decisions, and performance analysis.