The basic postulate of Accounting Accrual It is one of the fundamental principles of accounting, established by the Financial Reporting Standards (NIF) in Mexico.
This postulate establishes that transactions and economic events must be recognized at the time they occur, regardless of when the associated collections or payments are made.
Practical example
Case study statement
«Servicios Tecnológicos SA de CV» is a company that offers software development services.
Let's see how the accrual principle of accounting applies in the following situation during the month of December 2023.
Earned but Uncollected Income
Made:
- On December 15, 2023, the company completes a software project for a client and issues an invoice for $100,000 MXNThe client agreed to pay within 30 days, that is, on January 15, 2024.
Accounting Record:
- Date of registration: December 15, 2023.
| Bill | Must (MXN) | Credit (MXN) |
| Clients (Current Assets) | $100,000 | |
| Service Revenue (Income) | $100,000 |
Explanation:
- Customers: The right to receive payment in the future is recorded.
- Service Revenue: Revenue is recognized in December 2023, which is when the service was completed and delivered, even if cash is received later.
Conclusion
As we can see, income is recognized when the service was provided, regardless of when the company collects payment for it, which could be in a different month or even in another future fiscal year.
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