Recognition definition
/What is Recognition in Accounting?
Recognition is the recordation of a business transaction in an entity's accounting records. Here are several examples of recognition:
Recognition of a loss. A loss is recognized on a lower of cost or market analysis, thereby recording the loss in the accounting records.
Recognition of a sale. A sale transaction is recognized by recording revenue in the accounting records.
Recognition of an expense. An invoice received from a supplier is recorded as an expense in the accounting records.