diff --git a/crates/chain/src/indexed_tx_graph.rs b/crates/chain/src/indexed_tx_graph.rs
index 9adf7ed93..693378401 100644
--- a/crates/chain/src/indexed_tx_graph.rs
+++ b/crates/chain/src/indexed_tx_graph.rs
@@ -178,6 +178,10 @@ where
     ///
     /// `update` is a [`tx_graph::TxUpdate<A>`] and the resultant changes is returned as
     /// [`ChangeSet`].
+    ///
+    /// **Note**: Transactions in the `update` without temporal context (anchors or seen_ats)
+    /// will be stored but will not be considered canonical. See [`tx_graph::TxUpdate`] for
+    /// more details.
     pub fn apply_update(&mut self, update: tx_graph::TxUpdate<A>) -> ChangeSet<A, I::ChangeSet> {
         let tx_graph = self.graph.apply_update(update);
         let indexer = self.index_tx_graph_changeset(&tx_graph);
diff --git a/crates/chain/src/tx_graph.rs b/crates/chain/src/tx_graph.rs
index 701de335d..c2e77d34b 100644
--- a/crates/chain/src/tx_graph.rs
+++ b/crates/chain/src/tx_graph.rs
@@ -913,6 +913,9 @@ impl<A: Anchor> TxGraph<A> {
     ///
     /// The returned [`ChangeSet`] is the set difference between `update` and `self` (transactions
     /// that exist in `update` but not in `self`).
+    ///
+    /// **Note**: Transactions in the `update` without temporal context (anchors or seen_ats)
+    /// will be stored but will not be considered canonical. See [`TxUpdate`] for more details.
     pub fn apply_update(&mut self, update: TxUpdate<A>) -> ChangeSet<A> {
         let mut changeset = ChangeSet::<A>::default();
         for tx in update.txs {
diff --git a/crates/core/src/tx_update.rs b/crates/core/src/tx_update.rs
index 474890705..f92cf3e92 100644
--- a/crates/core/src/tx_update.rs
+++ b/crates/core/src/tx_update.rs
@@ -18,6 +18,13 @@ use bitcoin::{OutPoint, Transaction, TxOut, Txid};
 /// tx_update.txs.push(tx);
 /// tx_update.anchors.insert((anchor, txid));
 /// ```
+/// ## Temporal context
+/// To contribute to a wallet's balance, transactions must have an entry in either:
+/// - [`Self::anchors`]: for confirmed transactions.
+/// - [`Self::seen_ats`]: for unconfirmed transactions.
+///
+/// The built-in chain-source crates (`bdk_electrum`, `bdk_esplora`, `bdk_bitcoind_rpc`) handle this
+/// automatically. Transactions lacking temporal context are stored but ignored by canonicalization.
 #[derive(Debug, Clone)]
 #[non_exhaustive]
 pub struct TxUpdate<A = ()> {