Modified Accrual

Governmental accounting method. Revenue is recognized when it becomes available and measurable.

Governmental accounting method. Revenue is recognized when it becomes available and measurable. Expenditures are typically recognized in the period in which the liability is incurred except for: (1) inventories of materials and supplies that may be considered expenditures either when bought or used; (2) interest on general and special assessment long-term debt that is recognized on the date due; and (3) use of encumbrances. Most governmental funds follow the modified accrual method. See also Accrual Accounting.