Accrued Expenses

Accrued Expenses are short-term external resources – i.e. expenses which a company anticipates in the future but for which no invoice or any other tax document has been received or created. Thus, their amount and value can only be estimated.

Accrued expenses in practice: These expenses occur due to the accrual principle, which is considered crucial in accounting. Such expenses can be entered into the accounts only if they are repeat themselves on a regular basis, i.e. such numbers which may be anticipated and their amounts estimated for the following accounting period on the basis of past payments. Accrued expenses usually are:

• Salaries and wages
• Payments for utilities, i.e. water, waste disposal, electricity, gas, etc.
• Interest
• Taxes