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Date: 2024-11-09 Page is: DBtxt003.php n8-Accrual-accounting-1

Definitions for TrueValueMetrics
Accrual Basis Accounting

Accrual accounting is used in the business world because it matches the expenses and the revenues within a reporting period so that the profit results are not distorted.

This type of accounting has been the norm for commercial and industrial entity accounting since early in the industrial revolution ... but is not used in most governmental entities and many not for profit organizations (See also Cash Basis Accounting)

TVM uses the accrual principles, applying these concepts not only to the money dimension of the accounting but also to the value dimension. This has many benefits, notably bringing into account future impact of present activities, both beneficial and detrimental.

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