Accrued Revenue

Accrued revenue refers to income that has been earned by an organization for goods delivered or services rendered, but has not yet been invoiced or received in cash. This type of revenue is recorded in the accounting period in which it is earned, regardless of when payment is actually received. Accrued revenue is an important concept in accrual accounting, helping organizations accurately reflect all earned income in their financial statements. Nonprofits often encounter accrued revenue when services are provided under grant agreements, but the funds have not yet been received by period end. Recognizing accrued revenue ensures that the organization's financial position is represented fairly and consistently from period to period.