Accrued Revenue
Revenue earned but not yet received or recorded as cash.
What is Accrued Revenue?
Accrued revenue is income that a company has earned by delivering goods or services but has not yet billed or received payment for. Under accrual accounting, revenue is recognized when earned — not when cash is collected. Accrued revenue appears as a current asset on the balance sheet, representing a future cash inflow. Common examples include subscription services billed in arrears, interest income owed but not yet received, and consulting work completed before invoicing. When the customer pays, the accrued revenue entry is reversed and cash is debited.
Example
A consulting firm completes a $50,000 engagement in December but does not invoice the client until January. Under accrual accounting, the firm records $50,000 of accrued revenue in December — boosting December revenue and creating a current asset — even though no cash has been received yet.
Source: FASB Accounting Standards Codification — ASC 606 Revenue Recognition