Accrued Revenue

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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).

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BREAKING DOWN '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.

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RELATED FAQS
  1. How do you record adjustments for accrued revenue?

    An accountant records adjustments for accrued revenues through debit and credit journal entries in defined accounting periods ... Read Full Answer >>
  2. Why is accrued revenue not collected during the current accounting period?

    Accrued revenue is not collected during the current accounting period because it is used to measure the amount of revenue ... Read Full Answer >>
  3. What is the difference between accrued revenue and unrealized revenue?

    There is no difference between accrued revenue and unrealized revenue. It's possible that the confusion arises from the difference ... Read Full Answer >>
  4. How is accrued revenue accounted for in bookkeeping?

    When it comes to bookkeeping, accrued revenue is accounted for on a company's balance sheet in the form of an accrued revenue ... Read Full Answer >>
  5. What is the difference between accrued revenue and accrued interest?

    The difference between accrued revenue and accrued interest is that the former represents accumulated income that has not ... Read Full Answer >>
  6. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>

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