Lesson: Modified Accrual Accounting

In this lesson, dive into the core principles of modified accrual accounting with Nick Palazzolo, CPA, who breaks down the 'measurable and available' guideline crucial for this accounting method. This approach is vital within the current financial resources measurement focus and predominantly operates on an accrual basis. Nick elaborates on the revenue recognition criteria—when it can be quantified and is expected to be collected either in the current period or shortly thereafter, extending just beyond the fiscal year-end. He humorously alludes to the flexibility of government accounting while also detailing the specifics of expenditure recording, including the exceptions for debt service fund expenditures. Furthermore, he clarifies the slight deviations from the standard accrual basis related to incurred and unpaid debt service costs. This lesson simplifies the nuances of modified accrual accounting needed to navigate the maze of governmental accounting with ease.