Revenue is money received by a company or other organization. For companies, most revenue comes from selling products or services to individuals or other companies. It is also possible for companies to earn revenue through financial investments.
For accounts to identify a company’s revenue over a given period might seem, at first glance, a simple matter. It would surely involve no more than adding up all of the company’s sources of income. However, correctly identifying revenue is, in fact, a little more complex. The complexity arises from instances such as one where there is a gap in time between a company receiving payment for a good or service and actually delivering that good or service. This scenario is extremely common for most businesses. Businesses, particularly those which deal primarily or exclusively with other businesses, often experience delays of up to several months between submitting an invoice and having that invoice actually be paid. In some cases, the converse is also true : companies can receive payment before the good is supplied or the service delivered.
There is, in fact, no general agreement on how to handle this question. Different countries adopt different rules for how revenue in such cases should be declared. Even within countries, rules sometimes change over time.