Modified Accrual Revenue: What Does Available Actually Mean?
Governmental-fund revenue recognition focuses on whether resources are measurable and available to finance current-period expenditures.
Measurable
The amount must be reasonably determinable before it can be recognized.
Available
Revenue must be available soon enough to finance current-period expenditures under the government's applicable availability policy.
Property taxes
Property-tax questions often test whether amounts are collectible soon enough to be considered available.
Deferred inflows
Amounts that are measurable but not available can be deferred rather than recognized as current-period revenue in governmental funds.
The takeaway
Under modified accrual, recognition is tied to current financial resources, not simply to whether revenue was earned under full accrual concepts.
Related Summit guides
FAQ
Do governmental funds use full accrual revenue recognition?
No. They generally use modified accrual.
Does earned automatically mean recognized revenue in a governmental fund?
No.
Can unavailable revenue create a deferred inflow?
Yes.