Accrual Accounting
Definition
An accounting method in which revenue is recognised when earned and expenses are recognised when incurred, regardless of when cash is received or paid. Accrual accounting is the required basis for financial statements prepared for investor review at Growth Stage and above.
Common Misapplication
The most common misapplication is continuing to use cash-basis accounting at Growth Stage on the basis that the company is small or early-stage. Cash-basis accounting at Growth Stage produces financial statements that are not suitable for investor reporting or board governance without significant adjustment and disclosure.
FFI Standard Reference
This term is defined and applied in Book 1, Section 1.4: The Accounting Integrity Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Accrual Accounting. https://ffistandard.org/glossary/accrual-accounting/. 2026.