revenue

Financial TerminologyLegal glossary term

Legal Definition

Revenue refers to the total income generated by a business, often calculated as the total money received from sales or operations. In a legal context, it is the total monetary gain derived from the sale of goods or services, which forms the basis for financial reporting and contractual obligations.

Plain-English Translation

Imagine 'revenue' is the total amount of money a company earns from selling things or doing its job. It’s the total count of money that comes in after you sell stuff or complete a service. In law, it means the total income calculated for a period.

Context in Contracts

It matters because revenue forms the basis for calculating profitability, assessing compliance with financial targets, determining tax liability, and establishing the scope of contractual obligations in legal agreements.

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01

The total sales figure reported on a balance sheet.

02

The gross income generated from selling products or services.

Document context

How revenue shows up in legal documents

What is it?

Revenue is the total monetary gain derived from the sale of goods or services by a business. It represents the total amount of income generated before deductions are applied, and is crucial for determining financial performance and contractual obligations.

Why does it matter?

It matters because revenue forms the basis for calculating profitability, assessing compliance with financial targets, determining tax liability, and establishing the scope of contractual obligations in legal agreements.

When does it matter?

Revenue usually appears in financial statements, annual reports, contract clauses detailing pricing structures, and regulatory filings where the total income is reported.

Where is it usually seen?

It is commonly seen in corporate financial reports, tax filings, sales contracts, partnership agreements, and regulatory compliance documents related to business operations.

Who is affected?

The entity generating revenue (e.g., a corporation or individual) is affected, as are creditors, investors, and the government taxing the entity's earnings.

How does it work?

Revenue is calculated by summing up all sales transactions minus any direct costs of those sales to determine the net income available for the business operation under legal scrutiny.

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Wikipedia

Revenue

In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive revenue from interest,...

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Disclaimer: We do not provide legal advice. We translate legal language into plain English and help you prepare for a conversation with a lawyer.