What is RPO, and why is it important for SaaS companies?

Remaining performance obligation (RPO) includes both deferred revenue and backlog (unbilled contracted revenue). It’s especially valuable in SaaS because it highlights committed future revenue—offering better visibility into what’s ahead and enabling more informed strategic planning.

What brought about the need for RPO in financial reporting?

Remaining performance obligation (RPO) includes both deferred revenue and backlog (unbilled contracted revenue). It’s especially valuable in SaaS because it highlights committed future revenue—offering better visibility into what’s ahead and enabling more informed strategic planning.

Are there penalties for misreporting or miscalculating RPO under ASC 606?

Yes. Public companies are required to report RPO accurately under ASC 606. Inaccurate or incomplete reporting can lead to regulatory penalties, including potential action from the Securities and Exchange Commission (SEC). Beyond fines, companies may face reputational damage, increased audits, or legal challenges.

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