Accrued Revenue

AAA

DEFINITION of 'Accrued Revenue'

An asset class for goods or services that have been sold or completed but that have not yet been billed and/or paid for. Accrued revenue is income that has been incurred but not received, such as monthly rent that is due in arrears, or following the monthly rental period. The income has been earned (since an individual or firm rented the item) but the revenue has not been received (as per the rental agreement to pay in arrears).

INVESTOPEDIA EXPLAINS 'Accrued Revenue'

Accrued revenue is treated as an asset on the balance sheet rather than a liability. This reporting is important to the valuation of a company, particular in the service industry, where billing typically occurs after the work or service is complete. Without this asset class on financial reports, the company could appear to have much lower revenues, and may not have a fair method to balance expenses associated with the accrued revenue.

RELATED TERMS
  1. Accounting

    The systematic and comprehensive recording of financial transactions ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Asset

    1. A resource with economic value that an individual, corporation ...
  4. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  5. Revenue

    The amount of money that a company actually receives during a ...
  6. Expanded Accounting Equation

    The expanded accounting equation is derived from the accounting ...
Related Articles
  1. The Essentials Of Corporate Cash Flow ...
    Retirement

    The Essentials Of Corporate Cash Flow ...

  2. Getting To Know Business Models
    Entrepreneurship

    Getting To Know Business Models

  3. The Ins and Outs Of In-Process R&D Expenses
    Investing

    The Ins and Outs Of In-Process R&D Expenses

  4. Advanced Financial Statement Analysis
    Options & Futures

    Advanced Financial Statement Analysis

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center