2 min read
Definition
Accrued interest is the interest that has accumulated on a facility since it was last charged. On a daily-accrual loan, interest accrues each day and is typically charged monthly; between charge dates it sits as accrued interest. In the accounts it is recognised as it arises, matching cost to period.
In plain terms
It is the interest clock that is always running, even when nothing has yet hit your statement.
Why it matters for your company
Accrued interest is why settling mid-period still costs interest up to the day you pay. See interest capitalisation and accrual accounting.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Related reading
Daily interest accrual
Daily interest accrual means interest is worked out on the balance you owe each day, so every day you clear…
Read →
Interest capitalisation
Interest capitalisation adds unpaid interest to the loan principal, so future interest is charged on the…
Read →
Accrued vs cash interest
Accrued vs cash interest distinguishes interest recognised in the accounts as it builds up from interest…
Read →Accrual accounting (interest)
Accrual accounting records interest in the period it relates to, matching cost to the time the money was…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.