Fulfillment-based revenue recognition — revenue that waits for the shipment
Sell something on Monday, ship it on Friday, and your books tell a small lie all week: the revenue is already sitting in your P&L, but the cost of goods doesn't arrive until the shipment goes out. Inside one month it makes your daily margins jumpy; across a month-end it's worse — one period gets revenue with no cost, the next gets cost with no revenue. And if you take pre-orders or run backorders, "revenue you haven't earned yet" can sit in your income statement for weeks. Fulfillment-based revenue recognition is a new accounting policy that fixes this the way accountants say it should be fixed: invoiced sales park in a Deferred Revenue liability, and revenue is only recognized when the goods actually ship — released on the very same entry, and the very same date, as their cost.