Governance & Compliance
ASC 606 (for AI usage)
The revenue-recognition standard that requires you to recognize revenue as a performance obligation is satisfied. For usage-based AI, that means recognizing revenue as tokens are consumed — not when a contract is signed or credits are sold. Prepaid credits are deferred revenue drawn down on burn; a spreadsheet can't defend that treatment to an auditor.
Example
A customer prepays $12,000 for AI usage in January. Under ASC 606 you don't recognize $12,000 in January — you recognize it over the months as they consume, matching revenue to the tokens actually served. An auditable meter is what makes that recognition defensible.
This is a Tokenality concept. See how it works in the product overview or the live playground.
Related terms
Credit burndown
Drawing down a customer's prepaid balance as they consume, and recognizing that revenue on burn rather than at purchase. Prepaid credits are deferred revenue when sold; each metered unit of usage converts a slice of that liability into recognized revenue — which is why accurate metering is also an accounting control, not just a billing one.
Usage-based billing
Charging customers in proportion to what they actually consume — tokens, calls, or compute — instead of a flat fee, seat count, or user-count proxy. It aligns price with cost: because AI cost scales with tokens, usage-based billing is the only pricing that keeps a reseller's margin stable as customers grow.
Audit trail
The connected, time-ordered record of who did what, when, and under what authorization — the evidence you produce when someone asks "what happened?" For AI spend, a good audit trail records intent (the budget authorized) alongside execution (what actually ran).
Metering accuracy
How completely and correctly a system counts the usage it bills. A meter is accurate when every unit of consumption is captured exactly once — idempotently, under load, attributed to the right customer. The maxim: metering accuracy is revenue accuracy — every dropped or double-counted event is money mis-billed.