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Accrued Expenses |
Forbes
Nov 20
Comment
With 2013 rapidly approaching, many employers will soon determine the year-end bonus payments they'll make to their employees. As a recent IRS Private Letter Ruling reminds us, however, for an accrual basis employer, the details of their bonus...
Investing School
May 25
Comment
Simply defined, accrued benefits are those benefits earned over time. They are provided above and beyond the basic salary. This can be coverage earned through a pension plan, vacation time, sick days or paid time off. These benefits are often...
Canada.com
Mar 28
Comment
The use of accrued liabilities to pad earnings was a “legitimate” and standard practice at Nortel Networks Corp. in the early 2000s, and a process directly overseen by the company’s external auditors, Deloitte & Touche LLC, a Toronto...
Biomass Magazine
May 20
Comment
As the U.S. EPA decides how it should treat woody biomass in its Greenhouse Gas Tailoring Rule, I hope they take into account William Strauss’s study titled “How Manomet got it Backwards: Challenging the ‘debt-then-dividend’ axiom.”
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more ▼WIKI ANALYSIS
WIKI ANALYSIS| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
Accrued expenses are accounting expenses that have been recorded, but not yet paid
Accrued expenses are costs that a company has recognized for accounting purposes, but which is yet to pay for. Under the accrual method of accounting, companies will sometimes recognize and record expenses even before they are paid, as an expense's payment date is often not the best true measure of when the expense occurred. Such expenses are said to be accrued. Examples of items that can be classified as accrued expenses are taxes, payroll and interest.
The opposite of accrued expenses are prepaid expense. It occurs when a company pays for some goods or services in advance.
Examples
- A company may hire a consultant in March, but not pay his or her invoice until June. The expense should still be classified as a March expense.
- A company incurs $20,000 in taxes in 2008. These taxes are due for payment in March 2009. Because they've been incurred already, the taxes show up on the company's January 2009 balance sheet as an accrued expense. However, they won't be paid till March 2009.
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