The accounting glossary
What is accrued income?
Accrued income is income earned by the reporting date but not yet billed or received, depending on the arrangement. For revenue from customer contracts, the French notion factures à établir, or FAE, refers to earned revenue not yet invoiced. Billing date and the period of performance should be examined separately.
The short answer
Accrued income recognizes earned amounts in the relevant period rather than waiting for the invoice. Under ASC 606, a contract asset and a receivable are different: an unconditional right to consideration is a receivable; a right conditional on something other than time can be a contract asset. “Unbilled” alone does not determine the classification.
Vocabulary for earned but unbilled amounts
| Term | Use |
|---|---|
| Accrued income / revenue | Common description of earned income |
| Unbilled receivable | Unbilled amount, with rights to examine |
| Contract asset | Conditional right under ASC 606 |
| FAE / account 418 | French products earned but not yet invoiced |
Scroll the table if needed.
A fictional $9,300 consulting service
Assume a service runs evenly from March 15 through April 14, 2027 and is invoiced on April 15 for $9,300. The chosen inclusive-day convention gives 31 service days. At the March 31 close, 17 days have elapsed.
The illustrated accrual is $9,300 × 17 / 31 = $5,100. The remaining $4,200 belongs to the later service period under these assumptions. This calculation explains timing; it does not settle the contract’s recognition criteria or whether the right is a receivable or contract asset.
A zero result can mean an incomplete population
An invoice extract produced before period-end cannot contain invoices issued later. If the preparer uses only that extract to identify earned work billed after close, the result can be zero even though a service was performed. Check the extraction date and the period actually covered.
Look beyond the invoice list where necessary: service records, contract milestones and subsequent billing can reveal amounts to investigate. Maintain the link to evidence that performance occurred. A planned invoice is not proof that revenue has already been earned. Record how duplicate or subsequently canceled items were handled.
Do not turn a translation into a policy
French account 418 records customer products not yet invoiced. A US presentation requires its own analysis of the contractual right. The French revenue provisions amended in 2026 have a specified application date for 2027 financial years; confirm the applicable text when reviewing the French treatment.
Explain the period and the input dates
Close Review includes accrued-revenue work based on the invoice register. Keep the extraction date, service dates, calculation and proposed adjustment visible in the supporting file. The professional reviews the completeness of the population and approves the accounting conclusion before the team posts the adjusting entry.
Common questions
Is accrued income an overdue invoice?
Not by definition. Accrued revenue can be earned before an invoice exists. An overdue invoice has already been billed and has a different follow-up question.
Does unbilled always mean a contract asset?
No. Classification depends on the right to payment. An unconditional right can be a receivable even before billing.
Why can an accrual appear as zero?
The work may genuinely contain no amount, or the source population may be incomplete. Verify service evidence and subsequent invoices before reaching a conclusion.
Sources for further reading
Dated source checks do not replace review by the professional responsible for your engagement.
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