Accrual accounting is the standard method of accounting — mandated under Ind AS for listed companies and generally accepted accounting practice in India — in which revenues are recognised when they are earned (regardless of when cash is received) and expenses are recognised when they are incurred (regardless of when cash is paid). This is in contrast to cash-basis accounting, which only records transactions when cash changes hands. Accrual accounting provides a more accurate picture of a company's financial performance and position in a given period by matching revenues with the expenses incurred to generate them. Key accrual accounting concepts include accrued revenues (earned but not yet received), accrued expenses (incurred but not yet paid), deferred revenues (cash received before being earned), and prepaid expenses. For analysts and investors on Ventura Securities, understanding accrual accounting is fundamental to correctly interpreting income statements, balance sheets, and the reconciliation between reported profits and actual cash flows.
For android only
