Modified Accrual Basis of Accounting

Modified Accrual Basis of Accounting is a hybrid accounting method primarily used by governmental funds that combines elements of cash and accrual accounting. Revenues are recognized when they become both measurable and available to finance current period expenditures, typically within 60 to 90 days of fiscal year-end. Expenditures are recognized when a liability is incurred, regardless of timing of related cash flows, with some exceptions for long-term obligations. This method is required by GASB for governmental funds to better reflect their fiscal accountability.