Profit Realization
/ˈprɒfɪt ˌriːəlaɪˈzeɪʃən/
Definitions
- (n.) The process by which a business officially recognizes revenue or gains from a transaction or investment according to accounting principles and legal standards.
The company's profit realization must comply with applicable accounting rules to avoid misstating earnings.
- (n.) The legal acknowledgment or enforcement of entitlement to profits in contracts or financial agreements.
The dispute centered on the timing of profit realization under the terms of the partnership agreement.
Related terms
See also
Commentary
Profit realization is a key concept in both accounting and contract law, often requiring careful coordination between legal language and financial reporting standards to ensure clarity and enforceability.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.