Modified Accrual Revenue Recognition: Measurable and Available
Governmental funds focus on current financial resources, so revenue recognition depends on both measurability and availability.
Modified accrual
Governmental funds use modified accrual rather than full accrual accounting.
Measurable
Revenue must be measurable enough to determine the amount.
Available
Revenue must also be available to finance current-period expenditures under the applicable policy and rules.
Exam strategy
If the question is a governmental fund, do not default to commercial accrual timing.
The takeaway
Governmental fund revenue generally requires both measurability and availability.
Related Summit resources
FAQ
What is the core idea?
Governmental fund revenue generally requires both measurability and availability.
What should you identify first?
Governmental funds focus on current financial resources, so revenue recognition depends on both measurability and availability.
Why does this matter on the CPA Exam?
Understand why governmental funds recognize revenue differently from full accrual accounting.