This tool contains five sample policies that detail how to allocate expenses to the correct accounting period, ensuring that all costs related to a specific month are accurately reflected in the company's financial statements. It also provides guidelines on when to record expenses, such as when goods or services have been received or when ownership risks have passed to the company.

The policy emphasizes the need for monthly evaluation of accrual balances to prevent distortions at year-end. Furthermore, it outlines the responsibilities of different roles, such as corporate controllers and managers, in implementing and administering the policy. This document is a valuable resource for any organization looking to improve its financial management practices and ensure compliance with generally accepted accounting principles (GAAP).

The following factors must be considered when determining the time of recording for accrued liabilities:

• Ownership may be passed to the company through receipt of goods or equipment.
• The dates of titles may be passed from the seller to the company.
• A significant risk of return may not exist in the product on the received date.
• All outstanding liabilities may accrue.