accrue

verb ac·crue \ ə-ˈkrü \

Updated on: 16 Apr 2018

Definition of accrue

accrued; accruing

intransitive verb

1 : to come into existence as a legally enforceable claim

2 a : to come about as a natural growth, increase, or advantage

the wisdom that accrues with age

b : to come as a direct result of some state or action

rewards due to the feminine will accrue to me
—Germaine Greer

3 : to accumulate or be added periodically

interest accrues on a daily basis

transitive verb

: to accumulate or have due after a period of time

accrue vacation time

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accruable

play \-ˈkrü-ə-bəl\ adjective

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accruement

play \-ˈkrü-mənt\ noun

See accrue defined for English-language learners

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Examples of accrue in a Sentence

I'll get back all the money I invested, plus any interest and dividends that have accrued.
investments that have accrued interest and dividends

Recent Examples of accrue from the Web

Austin had been living at the home several weeks, and had been accruing the animals the entire time.

— christopher harress, AL.com, "Major lower Alabama bust arrests 20 drug dealers," 11 Apr. 2018
Perhaps my timing was off, given the 1.8 billion users and the $450 billion in value Facebook has accrued under Zuckerberg’s leadership since then.

— owen thomas, San Francisco Chronicle, "Why Mark Zuckerberg should step down as Facebook CEO," 8 Apr. 2018
With 10 bookings already accrued this season, his considerable ferocity is something to be both admired and harnessed by his prospective suitors, with Mauricio Pochettino notoriously adept at steering such sensibilities in the right direction.

— SI.com, "Borussia Dortmund Set to Battle Tottenham in the Race to Sign Celta Vigo Striker Maxi Gomez," 5 Apr. 2018
The proposed law requires the Board of Regents to enforce the rules and set up the repayment process, and unpaid amounts would accrue interest.

— wilborn p. nobles iii, NOLA.com, "3 bills that would change TOPS are advanced by Louisiana House lawmakers," 5 Apr. 2018
After that, any sick days that teachers accrue cannot be counted toward their pension.

— allison ross, The Courier-Journal, "Kentucky's surprise pension reform bill: The key points you should know," 30 Mar. 2018
The season typically consists of 183 days, but a full season is accrued at 171 days.

— jon meoli, baltimoresun.com, "Orioles face decisions on top prospects Sisco, Hays, Harvey, with club control a factor," 22 Mar. 2018
The consulting firm, which says it built and supplied all the equipment for the farm, claims that te Velde has refused to pay and that interest started to accrue at a rate of 18 percent since September.

— molly harbarger, OregonLive.com, "Oregon mega-dairy sued by state for release of wastewater, by contractors for unpaid bills," 8 Mar. 2018
The time accrued pushed the city past its winter operations overtime budget of $350,000, City of Naperville spokeswoman Linda LaCloche.

— erin hegarty, Naperville Sun, "Snowfall required 80 hours of mostly overtime work, cost Naperville $750K," 15 Feb. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'accrue.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of accrue

Middle English acrewen, acruwen, probably borrowed from Anglo-French *acreue "increase," noun derivative from feminine of acreu, past participle of acreistre "to increase, grow," going back to Latin accrēscere, from ad- ad- + crēscere "to grow" — more at ¹crescent

NEW! Time Traveler

First Known Use: 15th century

in the meaning defined at sense 2

See Words from the same year

Financial Definition of ACCRUE

accrue

verb

What It Is

To accrue is to record revenue and expenses in the periods in which they are incurred. Accruals, the result of accruing, are key components of the accrual method of accounting.

How It Works

Company XYZ must insure one of its buildings. The insurance company bills Company XYZ $600 every six months (one bill in January, the next in July). If each bill is for six months' coverage, then under the accrual method, Company XYZ would not record a $600 expense in January and a $600 expense in July (doing so would mean Company XYZ was using the cash method); it would instead record a $100 expense each month for the whole year. That is, Company would match the expense to the periods in which it is incurred: $100 for January, $100 for February, $100 for March, and so on.

As you can see, accruing recognizes economic events in certain periods regardless of when actual cash transactions occur.

Why It Matters

Although it is more complex, harder to implement and harder to maintain than the cash method of accounting, most analysts agree that accruing provides a more accurate picture of a company's performance. That's because in any given accounting period, revenues are associated with their corresponding expenses, which gives a truer picture of the real costs of producing the revenue in a given period.

Additionally, accruing allows companies to reflect the fact that sales may have been made and expenses incurred even if cash has not changed hands yet (as is often the case with sales made on credit and similar circumstances). This in turn produces financial statements that are comparable over time.

However, one of the big drawbacks of accruing is that it tends to obscure the nature of the company's actual cash position (e.g., a company may show millions in sales but only have $10 in its cash account because its customers haven't paid yet).

Source: Investing Answers