USA Accruing assets

[AssetKicker]

Is it ok to accrue an asset into an asset balance sheet account if it hasn't been paid yet due to timing? Depreciation wouldn't begin until it's paid but we just don't want to see a huge budget variance in the asset account

 

[LYAK]

Is it ok to accrue an asset into an asset balance sheet account if it hasn't been paid yet due to timing? Depreciation wouldn't begin until it's paid but we just don't want to see a huge budget variance in the asset account

Yes. Once it has been placed into service, it should be capitalized. In order to offset the increase in the assets balance, create a liability for the eventual payment.

 

[bklynboy]

Also, depreciation should commence once its in use and not when paid. Otherwise you are not reflecting the expense in the period you benefit from the asset.