Definition
Accrual budgeting consists of the use of accrual accounting measures in the budgeting process and it entails planning on an accrual basis, that is, budgetary spending authorizations and income forecasts are formulated in accrual terms. Under the accrual basis, the effects of transactions and other economic events are recognized when the underlying economic events occur, regardless of the timing of related cash flows. Following this basis, revenues are recognized when income is earned, and expenses are recognized when liabilities are incurred or resources are consumed. Accrual budgets incorporate in addition to cash flows, all projected noncash transactions and stocks of assets and liabilities.
Introduction
According to the accounting basis used to prepare the budget in public administrations, budgets can be classified into three main kinds: cash and commitments budget, obligation-based budget, and accrual budget. A cash budget shows receipts and expenditures, meaning the...
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Martí, C. (2016). Accrual Budget. In: Farazmand, A. (eds) Global Encyclopedia of Public Administration, Public Policy, and Governance. Springer, Cham. https://doi.org/10.1007/978-3-319-31816-5_2259-1
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DOI: https://doi.org/10.1007/978-3-319-31816-5_2259-1
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