Revenue Recognition
/ˈrɛvəˌnu ˌrɛkəgˈnɪʃən/
Definitions
- (n.) The accounting principle and legal standard determining when income is officially recorded as earned and realizable for contracts, businesses, or transactions.
The company must follow strict rules of revenue recognition to report its financial performance accurately.
- (n.) In legal context, the process of establishing entitlement to payment under contract terms affecting financial statements and tax obligations.
Revenue recognition disputes often arise during contract negotiations over deliverables and milestones.
Forms
- revenue recognitions
Related terms
See also
Commentary
Revenue recognition standards vary by jurisdiction and accounting frameworks; accurate drafting and compliance are critical to avoid legal and financial liability.
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.