Revenue Recognition

Revenue recognition is the process of recognizing revenue in the accounting records of a business. This typically involves determining when revenue can be recorded as earned, and how much revenue can be recognized. The principles for revenue recognition can vary depending on the specific industry and type of product or service being sold. In general, revenue is recognized when it is earned, which is typically when the product or service has been delivered and the customer has been invoiced. The amount of revenue recognized may be based on the terms of the sale, such as the amount of the invoice or the percentage of the product or service that has been delivered.