In accounting, arrears is used in at least three different ways.
Calls in arrears This is when any shareholder does not pay their
call money to a company on their due date. At that time, the company will deduct that calls in arrears from total called up capital for showing net paid up capital in balance sheet.
Dividends in arrears The word arrears is used to mean "past due" when describing the past, omitted dividends on cumulative
preferred stock. If a corporation fails to declare the preferred dividend, those dividends are said to be in arrears. The dividends in arrears must be disclosed in the notes (footnotes) to the financial statements. (Cumulative preferred stock requires that any past, omitted dividends must be paid to the preferred stockholders before the common stockholders will be paid any dividend.)
Annuities in arrears The word arrears means "end of period" when referring to
annuities (an annuity is a series of equal amounts occurring at equal time intervals, such as £1,000 per month for 20 years). If the recurring amount comes at the end of each period, the annuity is described as an annuity in arrears or as an ordinary annuity. A loan repayment schedule is usually an annuity in arrears. For example, you borrow £10,000 on September 30 and your first monthly payment will be due on October 31, the second payment will be due on November 30, and so on. ==Derivatives ==