The generally accepted accounting principles (GAAP) revenue recognition criteria is a widely accepted set of rules that must be followed by accountants to accurately report revenue in financial statements. In essence, this criterion defines when and how revenue should be reported on income statements. Generally speaking, the criteria requires that revenue can only be recognized when it is earned and measurable, meaning that all performance obligations have been met. Additionally, the related assets and liabilities must also be clearly identifiable. By understanding and properly applying these criteria, businesses are better equipped to provide reliable, timely financial information to their investors and stakeholders.