2 CFR §1108.180

1. (a)The charges may be reported on a cash or accrual basis, as long as the methodology is disclosed and is consistently applied.
2. (b)For reports prepared on a cash basis, expenditures are the sum of:
   1. (1)Cash disbursements for direct charges for property and services;
   2. (2)The amount of indirect expense charged;
   3. (3)The value of third-party in-kind contributions applied; and
   4. (4)The amount of cash advance payments and payments made to subrecipients.
3. (c)For reports prepared on an accrual basis, expenditures are the sum of:
   1. (1)Cash disbursements for direct charges for property and services;
   2. (2)The amount of indirect expense incurred;
   3. (3)The value of third-party in-kind contributions applied; and
   4. (4)The net increase or decrease in the amounts owed by the recipient or subrecipient for:
      1. (i)Goods and other property received;
      2. (ii)Services performed by employees, contractors, subrecipients, and other payees; and
      3. (iii)Programs for which no current services or performance are required, such as annuities, insurance claims, or other benefit payments.