What are accruals?

Accruals refer to the differences between net profit and operating cash flow, i.e., changes in assets and liabilities on the balance sheet that cannot be directly traced back to net profit or loss. This concerns expected short-term revenues or obligations for which no invoice or written payment request yet exists.

Examples of accruals are deposits into provisions, depreciation, and revenues from sales for which the financial settlement has not yet been completed. Accruals play an important role in financial reporting, as they help to provide a more complete picture of a company's financial position.

This term is relevant for understanding complex accounting processes and how companies report their financial performance.