accrue

play

verb ac·crue \ ə-ˈkrü \

Updated on: 26 Jul 2017

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

Over time, the best gains are accrued by limiting losses, and that is what separates Federer and Nadal from the field this year.

— craig o’shannessy, New York Times, "The Key to the Resurgence of Nadal and Federer? Watch Their Second Serves," 24 Aug. 2017
Within hours of the tweet going viral— all thanks to the leader of the free world — over 8,000 responses have accrued.

— devon ivie, Teen Vogue, "Donald Trump Retweeted a Meme About 'Eclipsing' Barack Obama," 24 Aug. 2017
For all of the prestige the streaming service has rapidly accrued, its audience is still subscriber-based and thus much smaller than ABC’s nationwide reach.

— david sims, The Atlantic, "What Netflix Can Offer Shonda Rhimes," 23 Aug. 2017
The Liquor Commission has a system in place in regards to how penalties are assigned to violations and escalated for businesses that continue to accrue offenses.

— david sharos, Naperville Sun, "Naperville Mexican restaurant charged with liquor code violations; owner could lose license," 23 Aug. 2017
Krause’s Tumblr, which has accrued over 40 sightings since its inception in 2016, suggests that the dress in question is a $50 one from Zara.

— emilia petrarca, The Cut, "This Ubiquitous Off-the-Shoulder Dress Is the New J.Crew Gingham Shirt," 16 Aug. 2017
Productivity advances from labor-saving innovations have accrued to this class — workers with the training to run the new systems and equipment and the managers and shareholders of the more efficient and more profitable operations.

— milton ezrati, National Review, "Globalization Can Be Good for American Workers," 7 Aug. 2017
If Macron’s project pulls the pillars of the post-war order from the premature graves to which they have been assigned, the benefits will accrue to us all.

— noah daponte-smith, National Review, "Rooting for Macron," 19 July 2017
Nearly immediately, the speech accrued its own nickname: The Rant.

— william d. cohan, vanityfair.com, "The Real Reason Jamie Dimon Went Berserk About America’s “Stupid Shit”," 17 July 2017

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

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First Known Use: 15th century

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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