- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 01 Feb 2018
Accruals are a form of accounting practice that can help to provide an more accurate representation of the economic condition of a project programme or organisation at the end of an accounting period or year.
Accruals are amounts that are unaccounted for, either because they are revenues earned or expenses incurred, that have not yet been recorded in the accounts. Recording, or estimating accruals enables an organisation to keep records of revenue and expenses that have not been received or incurred. This is particularly important in the construction industry where the supply chain is complex and extended, and invoices may not be paid for several weeks, or even months.
This differs from the cash method of accounting which involves the recording of revenue when it is received and the recording of expenses when they are paid. This raises the problem that revenue is not tied to the expenses that contributed to the generating of the revenue, which can make it difficult to identify the profitability of operations.
In the accrual method, income is reported in the year that the expenses that were incurred to generate that income have been paid. Expenses are reported only once goods and services have been delivered or provided.
 Related articles on Designing Buildings Wiki
Featured articles and news
A right to light generally refers to the right to receive sufficient light through an opening.
Interference and compatibility - the effects of electromagnetic fields in the workplace.
Important action is being taken to inspire young people to train as engineers.
A survey of Leicester’s historic buildings resulted in local listing being taken more seriously.
Demolition is the most high risk activity in the construction sector. Read our introductory article here.
BSRIA report on the domestic boiler market, with China recording the most 'dynamic market uptake'.
Do we really know everything important about the impacts of our infrastructure projects? And if we don’t, does it matter?
Former Chief executive Richard Howson blames government for being 'poor payers'.
An environmental plan is an essential tool for setting and managing environmental objectives for a project.
CLC call for an 'outcome-based, transparent and efficient' industry with new report.