> ## Documentation Index
> Fetch the complete documentation index at: https://zenskar.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Performance obligation policies

## Overview

A performance obligation policy determines when and how revenue for a performance obligation is recognized relative to invoicing.

## Policies

| Policy    | Details                                                                                                                                                                                                                                   |
| --------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Immediate | You wish to recognize the revenue of the PO immediately: as soon as the invoice is generated. Journal entries are created.                                                                                                                |
| Deferred  | The invoice is generated. However, the revenue is considered deferred or unearned. Deferred revenue is a liability. It is recognized proportionally as revenue as you deliver the promised service or product to your customer over time. |
| Unbilled  | The invoice has not been generated. However, the service or product has been delivered. This is applicable in postpaid use cases only.                                                                                                    |