Accrual revenue recognition is the standard accounting practice of recognizing revenues when earned, rather than when cash is received. This method of revenue recognition is used in order to accurately report the performance or success of a business entity. In short, it allows companies to account for and track earnings as they occur instead of waiting for actual payments to be received or settled. In accrual revenue recognition, businesses will only recognize revenue once a good or service has been delivered and all associated risks and rewards have passed over to the customer. As a result, the price, terms, and any other related conditions must be established prior to revenue recognition.