Revenue Recognition In Sustainable Business Models: A Literature Review

Abstract

The implementation of sustainable business models requires rigorous accounting standards, in which revenue recognition plays a crucial role in transparently reflecting an entity's economic performance and sustainability to stakeholders. Although accounting regulatory frameworks have evolved, there remains a gap in the literature regarding the comprehensive integration of revenue recognition principles within sustainable business models, particularly in relation to financial reporting dynamics and independent auditors' assessments. This study aims to conduct a systematic literature review (SLR) to analyze the implementation, challenges, and implications of revenue recognition in sustainable business models. The study employs a qualitative approach based on a systematic literature review, involving the screening and evaluation of scientific journal articles and relevant accounting standards concerning revenue recognition and sustainable business governance. The findings indicate that revenue recognition in sustainable business models often involves accounting complexities, particularly those related to long-term performance estimation, compliance with reporting obligations, and alignment between revenue realization and sustainability principles. This study contributes theoretically by enriching the financial accounting literature and highlighting the importance of adapting revenue recognition standards to address the complexities of future sustainability-oriented business models.