What does full accrual mean on the CPA exam?
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Full accrual. Recognizing revenue when earned and expense when incurred, and reporting every asset and liability including long-term ones. The basis for government-wide and proprietary statements.
Defined against GASB 34.
Which CPA exam sections use full accrual?
Full accrual appears in 2 CPA exam sections: BAR, FAR.
Other terms defined against GASB 34
- capital assets: In GOVERNMENTAL reporting, long-lived assets such as land, buildings and infrastructure.
- enterprise fund: A proprietary fund used where a government charges outside users for goods or services, run on the full accrual basis like a business.
- governmental activities: The part of a government's operations financed mainly by taxes rather than by fees, reported on the government-wide statements on the full accrual basis.
- governmental funds: The funds that account for tax-supported activity, reported on the modified accrual basis with a current financial resources focus.
- internal service fund: A proprietary fund that supplies goods or services to other parts of the same government on a cost-reimbursement basis, such as a motor pool.
- management's discussion and analysis: A narrative overview management provides ahead of the financial statements.
- modified accrual: The basis for governmental fund statements: revenue when measurable and available, expenditure when the liability is incurred.
- required supplementary information: Schedules a government must present outside the basic statements, such as budgetary comparisons and pension trend data.
Related terms
- temporary difference: A difference between the tax basis of an asset or liability and its reported amount that will produce taxable or deductible amounts in future years.
- cash basis: Recognizing revenue when cash is received and expense when cash is paid.
- net income: What is left after every revenue and expense of the period, including tax and discontinued operations.
- asset retirement obligation: A legal obligation associated with the retirement of a tangible long-lived asset, recognized at fair value in the period incurred, with an equal asset retirement cost capitalized into the asset.
- reporting entity: The unit whose statements are being presented, including everything it controls.
- right-of-use asset: The lessee's asset representing its right to use the leased item for the lease term.