Revenue Recognition Calculator

SaaS and subscription businesses collect cash on different schedules to how they deliver value. A customer might pay annually upfront, but your obligation is to provide the service for 12 months.

Revenue recognition aligns your financial statements with the reality of value delivery. Under ASC 606 (US GAAP) and IFRS 15 (international standards), you follow a five-step model:

1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the price to performance obligations
5. Recognise revenue as obligations are satisfied

For most SaaS contracts, the performance obligation is satisfied ratably over the service period — which is why straight-line recognition is the most common method. This calculator automates step 5 for single-obligation contracts.

In practice, most SaaS contracts only require step 5 to be automated — which is what this calculator does.