What is an accrued item in a closing statement?

An accrued item in a closing statement refers to expenses that have been incurred but have not yet been paid. This means that the cost has been recognized and is due, but the actual payment has not yet been executed. In a real estate transaction, these accrued items may include things like property taxes or utility bills that the seller owes for the period before the closing date.

In the context of a closing statement, identifying these items is crucial for accurately calculating the final amounts due from both the buyer and the seller. For instance, if a seller has unpaid property taxes that have accrued up to the closing date, the buyer may agree to reimburse the seller for that amount to ensure that the seller's liabilities are settled appropriately during the transfer of ownership. This ensures that both parties account for all financial obligations as part of the transaction.