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  • Question

    I'm trying to locate DoD accepted definitions for incurred and accrued costs. I found financial definitions in BCF 103, but was unable to locate "incurred" and "accrued". Thank you!


    Answer

    Incurred is when you have received a good or service and are now liable to pay for it.  Accrued is when you have actually recorded that liability on your records.  Anything incurred should be accrued.  You should never accrue for something that has not been incurred. 
     
    DoDi 7000.14  frequently used the term “incur” without explicitly defining it; however the glossary section does have a definition for accrued expenditures:
     
    Accrued Expenditures.
    The term used for the credits entered into the budgetary accounts to recognize liabilities incurred for (1) services performed by employees, contractors, other Government accounting entities, vendors, carriers, grantees, lessors, etc.; (2) goods and other tangible property received; and (3) items such as annuities or insurance claims for which no current service is required. Accrued expenditures are categorized as either paid or unpaid.
     
    Accrued Expenditure-Paid.
    The budgetary account matching the proprietary account "funds disbursed." It represents the dollar value of goods and services received for which payment has been made.
     
    Accrued Expenditure-Unpaid.
    The budgetary account matching the proprietary account, "accounts payable." It represents the dollar value of goods and services received for which payment has not been made. (Also see "Accounts Payable.")

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