Unbilled Revenue
Unbilled revenue is revenue that has been recognized because the company has performed, but for which no invoice has yet been issued.
Billing
Explanation
Unbilled revenue arises, for example, when:
• services or usage occur during a period but are invoiced in the next billing cycle,
• project work progresses between billing milestones,
• revenue allocated to delivered items exceeds the amounts billed so far.
Under ASC 606 and IFRS 15, the balance sheet presentation depends on the company's right to consideration:
• if the right is unconditional – only the passage of time is required – it is an (unbilled) receivable,
• if the right is conditional on further performance, it is a contract asset.
Why It Matters
Unbilled balances must be estimated or calculated accurately, assessed for credit losses, and reconciled with subsequent invoices. Misclassifying contract assets as receivables – or the reverse – affects presentation and disclosures. Clear cut-off rules between usage, billing cycles, and accounting periods are essential.
Related Terms
Contract Asset · Billing Cycle · Milestone Billing · Deferred Revenue · ASC 326 Credit Losses
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