Difference between revenue recognition & MRR - Woofresh

Difference between revenue recognition & MRR

All QuestionsCategory: PaymentsDifference between revenue recognition & MRR
asked 2 years ago

Difference between revenue recognition & MRR

1 Answers
answered 2 years ago

Firstly, we should know what is MRR and revenue recognition.

MRR stands for the monthly recurring revenue as understood and gauged by the full form is the predictive measure as to know what is the actual revenue that will be generated at the end of the month by any business.

On the other hand, the revenue recognition is an accounting method to know the revenue generated in a specific period of time, and that revenue can only be considered when the specific service has been rendered or delivered to the customer, before which it cannot be included as a part of the revenue of recognition.

Now, so far as the difference is concerned is that in the MRR the money coming is predictable & fixed and is limited to a month only, whereas in case of the revenue recognition the revenue is calculated on broader basis and even if the payment has been done in advance the recognition will only be done when a particular tenure of the service has been completed.

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0 Answers
answered 2 years ago

Firstly, we should know what is MRR and revenue recognition.

MRR stands for the monthly recurring revenue as understood and gauged by the full form is the predictive measure as to know what is the actual revenue that will be generated at the end of the month by any business.

On the other hand, the revenue recognition is an accounting method to know the revenue generated in a specific period of time, and that revenue can only be considered when the specific service has been rendered or delivered to the customer, before which it cannot be included as a part of the revenue of recognition.

Now, so far as the difference is concerned is that in the MRR the money coming is predictable & fixed and is limited to a month only, whereas in case of the revenue recognition the revenue is calculated on broader basis and even if the payment has been done in advance the recognition will only be done when a particular tenure of the service has been completed.