Revenue Recognition is an accounting principle that determines when and how revenue is recorded in financial statements. It ensures that income is recognized in the period it is earned, rather than when cash is received. This helps provide a clearer picture of a company's financial performance. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) provide guidelines for revenue recognition. These standards require businesses to follow specific criteria, such as identifying contracts with customers and determining the transaction price, to ensure accurate and consistent reporting of revenue across different companies.