This involves recognizing revenue when it becomes both available and measurable, rather than when it is earned . " Expenditures ", a term preferred over " expenses " for modified accrual accounting, are recognized when the related liability is incurred.
22.
And it would gradually eliminate a tax break for " certain large farm corporations, " including major poultry producers like Tysons, that had allowed them to delay indefinitely taxes on some income earned during a switch from cash to accrual accounting in the 1980s.
23.
"It is moving on to accrual budgeting and by the year 2000, we should have moved on to accrual accounting fully-balance sheet, profit and loss statement, cash flow . . . all of those things which should start to appear in the Government framework, " he said.
24.
The logic is that, if the company made $ 100 that year ( net income ), and they are using the accrual accounting system ( not cash based ) then any income they generated that year which has not yet been paid for in cash should be subtracted from the net income figure in order to find cash flows from operating activities.
