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Revenue Recognition for direct charges Private preview

Learn how revenue recognition works with direct charges.

Revenue collected with application fees

With Connect, your platform can make charges directly on the connected account and take application fees in the process. To add an application fee on a direct charge, pass an optional application_fee_amount value. Stripe recognizes the revenue immediately.

In this example, the application_fee_amount="200" is set on the direct charge.

• On January 15, you make a direct charge of 10 USD with a 2 USD application fee.
• The 2 USD application fee transfers to your platform.
• 8 USD is netted in the connected account.

Contra revenue with issuing refunds

To refund an application fee, pass a refund_application_fee value of true in the refund request or provide a refund_application_fee value of false to refund the application fee separately through the API. In both cases, Stripe books the refunded application fee as contra revenue.

In this example, the application_fee_amount="200" is set on the charge.

• On January 15, you make a direct charge of 10 USD with a 2 USD application fee.
• The 2 USD application fee transfers to your platform.
• 8 USD is netted in the connected account.
• On February 21, Stripe refunds the full charge amount of 10 USD and the full application fee amount of 2 USD.