The Core Revenue Recognition Principle is a fundamental accounting concept that establishes when, and in what amount, revenue should be recognized. At its core, the principle states that income should be recognized when it is realized or realizable, and when it has been earned. This means that income should only be reported when a company can prove it has either received cash (realized) or has a valid and enforceable right to receive it (realizable). The Core Revenue Recognition Principle is an essential component of successful financial management and sets the standard for accurate recording of all business transactions.