Cash received is not revenue earned (opens in new tab)

Patrick McKenzie (patio11) reads his classic Bits about Money essay explaining why revenue recognition in software is more complicated than most engineers, founders, and financial reporters think. The essay covers the accounting rules behind SaaS subscriptions, the deferred revenue problem that surprised him when he sold his own companies, and the surprisingly intricate standards governing virtual goods in mobile games. He then turns to AI labs, where rapid revenue growth has prompted questio...