> ## Documentation Index > Fetch the complete documentation index at: https://getlago.com/docs/llms.txt > Use this file to discover all available pages before exploring further. # Overview > Turn your billing data into accrual-basis revenue you can report, period by period. **ALPHA FEATURE** 🚧 Revenue recognition is in alpha. We're releasing it gradually, account by account, rather than opening it to everyone at once. That lets us validate the figures against real ledgers before a general release. Expect changes while it's in alpha: the reports, the exports, and the accounting treatment of edge cases may all evolve between releases. Don't treat the output as final for a statutory close without reconciling it yourself. It also ships as a premium feature. To ask for access for your account, **[contact us](mailto:hello@getlago.com)**. Invoicing tells you what you billed. Revenue recognition tells you what you **earned**. Those are rarely the same number in the same month. A customer who pays \$1,200 up front for a year of service hasn't given you \$1,200 of revenue in January. They've given you one month of earned revenue and eleven months you still owe them. Revenue recognition spreads that \$1,200 across the year so each month shows the revenue you actually earned, no matter when you invoiced or got paid. Lago reads your existing billing data (invoices, subscriptions, usage, payments, credit notes, wallets) and produces the recognized and deferred revenue figures for every period, automatically. There's nothing to calculate by hand. ## Who this is for Revenue recognition is built for the people who close the books and report the numbers: finance teams, billing operations, RevOps, and founders who need revenue figures that hold up to an audit and reconcile against the general ledger. ## What you get The revenue you earned in a period, regardless of billing or payment timing. Revenue you invoiced in advance but haven't earned yet. How each invoice releases into revenue across current and future periods. Balance sheet and income statement views built from your billing activity. The underlying double-entry lines behind every figure. ## How recognition works, in one line Lago recognizes revenue **when the service is delivered**, not when you issue the invoice or collect payment. For anything delivered over time, like a subscription, that means recognizing a little each day across the service period. This is the core principle behind **ASC 606** and **IFRS 15**, the revenue recognition standards used under US GAAP and IFRS. Lago applies it automatically, so the figures you report are built on a standards-compliant basis. Lago applies the revenue recognition logic automatically based on the billing data available for the period. The recognition method, daily allocation, and accounting treatment are decided by Lago. There are no allocation rules or accounting settings for you to configure. ## Key terms Define these once and the rest of the section reads easily. | Term | What it means | | ---------------------- | ------------------------------------------------------------------------------------------------------------------- | | **Recognized revenue** | Revenue you've earned because the service was delivered. Always shown before tax. | | **Deferred revenue** | Money you invoiced in advance for service you haven't delivered yet. A liability until you earn it. | | **Unbilled revenue** | Service you've delivered but haven't invoiced yet. Also called accrued revenue. Becomes a receivable once invoiced. | | **Reporting period** | The window you're reporting on, usually a calendar month such as January 1 to January 31. | | **Service period** | The window the service covers. This is what Lago spreads revenue across. | | **Statement** | A summary view of balances and activity: balance sheet and income statement. | | **Journal entry** | A balanced accounting record (debits equal credits) created for each billing event. | ## Where to go next The recognition model in plain language, with a worked example. Turn it on and review your first period. One customer, one month, every moving part. The most common case, billed in advance or in arrears.