Accrual basis

• Financial statements are prepared on the accrual basis of accounting.
• The effects of tranacations and other events are recognised when they occur and they are recorded in the accounting records and reported in the financial statements of the period to which they relate.
• ...inform users not only of past transactions involving the payment and receipt of cash but also of obligations to pay cash in the future and of resources that represent cash to be received in the future.
• Hence, they provide the type of information about past transactions and other events that is most useful to users in making economic decisions.