Revenue
Revenue is the total income a business earns from selling goods or services in a period, before any costs are deducted. Also called sales or turnover, it is the top line of the income statement.
Also known assales · turnover
See it move
A formula card states Revenue = Price per unit × Units sold and glosses each term: Revenue is total earnings from sales before any cost is deducted, Price is the selling price per unit, and Units is the number sold in the period. An example shows Valora Café earning €17,500 for March by selling 5,000 coffees at €3.50 each. Two supporting notes complete the picture: revenue is recognised when earned — not when cash arrives — and profit is what remains only after all costs have been subtracted from this top-line figure.
The formula
Variables
- Quantity of units sold (units)
- Selling price per unit (€ per unit)
Check yourself
A software consultancy completes a project for a client on 29 March and invoices €18,000. The client settles the invoice on 15 April. Under accrual basis accounting, in which period should the €18,000 be recognised as revenue?
If you trained under a national GAAP
DE · HGBWhere national-GAAP intuition diverges from the international standard
HGB (German)
Under HGB, revenue is recorded only once the underlying transaction is fully realised — goods must have been delivered or the service fully completed, with the remaining risks transferred to the buyer. Partial completion of a contract does not give rise to revenue. For arrangements covering multiple elements, HGB does not require consideration to be split across separately identifiable deliverables; each item tends to be treated as a single transaction recognised on completion.
IFRS
IFRS 15 requires the seller to identify each distinct performance obligation within a contract and allocate the transaction price proportionally across those obligations. Revenue is recognised as each obligation is satisfied, either at a point in time or progressively over time. A bundled contract covering product delivery plus ongoing support would spread revenue recognition across the full service period from inception, whereas HGB would recognise each element only once it is fully complete.