NPR Marketplace: Robert Rostan in Under Armour investigation focuses on “revenue recognition.” What’s that?


The sportswear company Under Armour on Monday confirmed federal officials have been looking into its accounting practices for more than two years. Under Armour says it hasn’t done anything wrong. The Wall Street Journal, which broke the news, said the probe includes both criminal and civil investigations and that authorities are focusing on something called revenue recognition. What exactly is revenue recognition, and why does it matter?