ACCRUAL ACCOUNTING
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Business Management
The process by which an individual determines direction, influences a group, and directs the group toward a specific goal or mission.
OrientMCT
ACCRUAL ACCOUNTING
Course Description
In financial accounting or accrual accounting, accruals refer to the recording of revenues
that a company has earned but has yet to receive payment for, and the expenses that have been
incurred but that the company has yet to pay. In simple terms, it is the accounting adjustment of
accumulated debits and credits. Such accounting practices, therefore, have a general impact on
the handling of the income statement and the balance sheet. The affected accounts include
accounts payable, liabilities and non-cash-based assets, goodwill, future tax liabilities, and future
interest expenses, among others.
Learning Outcome
1. Define accrual accounting and how it is used to record business transaction.
2. Explain what an accrual is and illustrate how it works.
3. Compare how cash basis accounting differs from accrual accounting.
4. Explain how you affect the accrual process.
5. Discuss the importance of accrual accounting for financial reporting purposes.
Course Content
- 1. Objectives
- 2. The implementation of the accrual basis of accounting system
- 3. Performance
- 4. Improving government performance assessment in terms of achievements and the cost
and effectiveness and of the services provided. - 5. Rationalization
- 6. Providing a clearer understanding of government success in managing its resources and
rationalizing its expenditures. - 7. Analysis
- 8. Providing a picture of financial statements for a number of years, allowing comparison
and analysis processes over the years. - 9. Resources
- 10. Providing a better, more effective comparison among the different resource usage
options. - 11. Cash flow
- 12. Assisting in assessing the performance of Federal Government ministries and entities in
terms of their financial position and cash flows. - 13. Cost
- 14. Determining the total cost of government services and facilitating the comparison
process with the cost of the private and voluntary sector’s services. - 15. Accuracy
- 16. Enhancing the capacity of providing more accurate and integrated accounting records.
- 17. Methodology
- 18. Study of:
a. UAE Accounting Standards Guide on Accrual Basis.
b. Accounting Policies and Procedures Manual on Accrual Basis - 19. Impact on Fixed assets/ Inventory of accrual basis of accounting from cash basis
accounting - 20. Impact on Accounts Payable of accrual basis of accounting from cash basis accounting
- 21. Impact on Employee Benefits of accrual basis of accounting from cash basis accounting
- 22. Changes in the methods and system to be made
- 23. Transition treatment to be made adjustments to be performed
- 24. Changes to be made in the organization policies and procedure manuals
- 25. Changes in procurement and contracts, supplier and customer contracts and effect on
revenues and expenses - 26. Cash flow statement impacts along with receivables payables inventory and fixed assets
- 27. Impact on employee benefits
- 28. As per IFRS and adopted standards to follow.
- 29. Changes to be made to ERP and relevant treatment
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