Earned Revenue: Earned revenue is the revenue that a company has recognized on its income statement after providing the goods or services to the customer. It represents the portion of unearned revenue that has been earned through the completion of the performance obligation.
Revenue Recognition: Revenue recognition is the accounting principle that dictates when a company can record revenue on its financial statements. It involves determining the appropriate timing and amount of revenue to be recognized based on the delivery of goods or services to the customer.
Performance Obligation: A performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. It represents the unit of account for revenue recognition, as a company must fulfill its performance obligations before it can recognize the associated revenue.