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

accruable

play \-ˈkrü-ə-bəl\ adjective

accruement

play \-ˈkrü-mənt\ noun

Examples of accrue in a Sentence

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

  2. investments that have accrued interest and dividends

Recent Examples of accrue from the Web

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


Financial Definition of ACCRUE

accrue

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).


ACCRUE Defined for English Language Learners

accrue

play
verb

Definition of accrue for English Language Learners

  • : to increase in value or amount gradually as time passes : to grow or build up slowly

  • : to come to or be given to someone


Law Dictionary

accrue

play
verb ac·crue \ ə-ˈkrü \

legal Definition of accrue

accrued; accruing
intransitive verb
1 :to come into existence as an enforceable claim :vest as a right
  • action…does not accrue until the plaintiff knew or reasonably should have known that he may have suffered injury
  • National Law Journal
Note: Statutes of limitations begin to run when a cause of action accrues.
2 :to come by way of increase or addition :arise as a growth or result usually used with to or from
  • advantages accruing to society from the freedom of the press
  • interest accrues to the seller as a result of the delay
3 :to be periodically accumulated in the process of time whether as an increase or a decrease
  • the accruing of taxes
  • allowing the receivable interest to accrue
transitive verb
1 :to accumulate or have due after a period of time
  • authorized by law to accrue leave in the maximum amount of 90 days
2 :to enter in the books as an accrual

Origin and Etymology of accrue

Middle French accreue increase, addition to a property, from feminine of accreu, past participle of acreistre to increase



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