Revenue Recognition

Definitions

1. The accounting process of determining when revenue is officially recorded as earned rather than just when cash is received. In subscription and services businesses, revenue recognition rules can make reported performance differ sharply from collections.

   In plain English: The accounting rules for when earned revenue can officially be recorded.

   Example: "Revenue recognition spread the annual contract over the service period instead of booking it all at once."

Related Terms

• Cost of Goods Sold
• Cost of Revenue
• EBITDA
• G&A
• Accrued Revenue
• Capital Expenditure
• Operating Expense
• OpEx