Accrual Accounting

Reference work entry


Accrual basis of accounting; Accrual concept; Accrual method; Accrual system


Accrual accounting is “a basis of accounting according to which all the transactions and events are recorded when they occur, without a relation with cash inflow or outflow. Therefore, the operations and events are recorded in the accounting records and recognized in the set of financial statements of the periods to which they relate. The elements recognized under accrual accounting are assets, liabilities, net assets/equity, revenue, and expenses” (IPSASB 2006).

The Accounting Methods

The importance of the accounting information presented in the financial statements for decision-makers is very well known in practice as well as in literature. The financial statements represent the result of recording transactions in a sequential and systematic manner following a set of rules, prescribed in the accounting method. Most entities typically use one of two basic accounting methods to record...

This is a preview of subscription content, log in to check access.


  1. Anessi-Pessina E, Barbera C, Sicilia M, Steccolini I (2016) Public sector budgeting: a European review of accounting and public management journals. Account Audit Account J 29(3):491–519CrossRefGoogle Scholar
  2. Blöndal J (2003) Accrual accounting and budgeting: key issues and recent developments. OECD J Budg 3(1):43–59CrossRefGoogle Scholar
  3. Busca I, Caperchione E, Cohen S, Manes-Rossi F (2015) Public sector accounting and auditing in Europe: the challenge of harmonization. Palgrave, BasingstokeCrossRefGoogle Scholar
  4. Cohen S, Kaimenakis N, Venieris G (2013) Reaping the benefits of two worlds: an explanatory study of the cash and the accrual accounting information roles in local governments. J Appl Account Res 14(2):165–179CrossRefGoogle Scholar
  5. Chan JL (2003) Government accounting: an assessment of theory, purposes, and standards. Public Money Manag 23(1):13–20CrossRefGoogle Scholar
  6. Caperchione E, Lapsley I (2011) Making comparisons in government accounting. Fin Account Manag 27(2):103–106CrossRefGoogle Scholar
  7. Deaconu A, Nistor C S, Filip C (2011) The impact of accrual accounting on public sector management. An exploratory study for Romania, Transylvanian Review of Administrative Sciences, No. 32 E/2011, pp. 74–97Google Scholar
  8. FEE (2006) Better financial information for better decision makingGoogle Scholar
  9. FEE (2016) Accrual accounting: a key step toward better public financesGoogle Scholar
  10. Guthrie J (1998) Application of accrual accounting in the Australian public sector – rhetoric or reality? Fin Account Manag 14(1):1–19CrossRefGoogle Scholar
  11. Hyndman N, Connolly C (2011) Accruals accounting in the public sector: a road not always taken. Manag Account Res 22(1):36–45CrossRefGoogle Scholar
  12. IFAC (2013) Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities” IFAC Public Sector Committee Study no 14Google Scholar
  13. IMF (2016) Implementing accrual accounting in the public sectorGoogle Scholar
  14. IPSASB (2006) Glossary of Defined Terms, IPSAS 1 to IPSAS 12Google Scholar
  15. IPSASB (2014) Conceptual framework for general purpose financial reporting by public sector entitiesGoogle Scholar
  16. Jones R, Lüder K (2011) The Federal Government of Germany's circumspection concerning accrual budgeting and accounting. Public Money Manag 31(4):265–270CrossRefGoogle Scholar
  17. Khan A, Meyer S (2009) Transition to accrual accounting. IMF, Washington, DCGoogle Scholar
  18. Kober R, Lee J, Ng J (2010) Mind your accruals: perceived usefulness of financial information in the Australian public sector under different accounting systems. Fin Account Manag 26(3):267–298CrossRefGoogle Scholar
  19. Likierman A (2000) Changes to managerial decision-taking in UK central government. Manag Account Res 11(2):253–261CrossRefGoogle Scholar
  20. Manes-Rossi F, Cohen S, Caperchione E, Brusca I (2016) Harmonizing public sector accounting in Europe: thinking out of the box. Public Money Manag 36(3):189–196CrossRefGoogle Scholar
  21. Moretti D, Cavanagh J, Flynn S (2016) Implementing accrual accounting in the public sector, IMF Technical Notes and Manuals No. 2016/06Google Scholar
  22. Nasi G, Steccolini I (2008) Implementation of accounting reforms. Public Manag Rev 10(2):175–196CrossRefGoogle Scholar
  23. PWC (2014) Collection of information related to the potential impact, including costs, of implementing accrual accounting in the public sector and technical analysis of the suitability of individual IPSAS standardsGoogle Scholar
  24. Ryan C (1998) The introduction of accrual reporting policy in the Australian public sector: an agenda-setting explanation. Account Audit Account J 11(5):518–539CrossRefGoogle Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Accounting and AuditBabes-Bolyai UniversityCluj-Napoca, ClujRomania