Revenues

Revenues, in a business or government context, are the inflows of economic benefits that arise from the ordinary activities of an entity. In accounting, revenue refers to the income earned from the sale of goods, the provision of services, or other activities that are part of the entity's core operations. It is distinct from gains, which may result from peripheral transactions, and from investment income, which stems from holdings rather than from operating activities.

Corporate revenue is typically classified as operating revenue, generated by primary business activities, such as sales of products or rendering services. Non-operating or other revenue includes items such as interest, dividends, rents, royalties, and gains from asset sales. Government revenue includes taxes, social contributions, fees, fines, and grants. In many entities, revenue may be recurring or nonrecurring; for example, subscription fees provide recurring revenue, while one-time licensing fees are nonrecurring.

Revenue recognition: Under accrual accounting, revenue is recognized when control of the goods or services transfers to the customer, and the amount recognizes the consideration expected to be entitled in exchange for those goods or services. Standards such as IFRS 15 and ASC 606 guide how to identify performance obligations, allocate transaction prices, and determine timing of recognition. Revenue is typically reported gross, with allowances for returns, discounts, and rebates, to arrive at net revenue for the period.

Presentation and use: Revenue appears as the top line of the income statement and serves as a primary indicator of an entity's scale and growth. Analysts assess revenue growth, revenue quality, and the mix of revenue sources to evaluate sustainability and profitability. Revenue alone does not indicate profitability, since costs and expenses determine net income.