Recognizing Usage-Based Revenue Under ASC 606
Written by Nirmala Murugesan
Curated by Rubric Financial
Last updated
1 / 5
Recognition Follows Delivery
- Under ASC 606, revenue is recognized as you satisfy performance obligations to the customer.
- For usage-based products, the obligation is satisfied as the customer consumes the service.
- That means you generally recognize consumption revenue in the period the usage occurs.
- Cash collected in advance does not become revenue until the underlying usage happens.
Go deeper on this topic: SaaS Revenue Recognition Under ASC 606: A Founder's Guide to Getting It Right→
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About the author
Nirmala MurugesanCA, CPAPartner, Accounting
CA and CPA with 20+ years across U.S. GAAP, IFRS, and cross-border entity accounting. Leads accounting and controllership at StartupCFO: clean close, audit-ready books, and multi-entity structures for venture-backed startups.
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