Deferred Revenue Meaning In Accounting

Deferred revenue is a payment from a customer for future goods or services.

Deferred revenue meaning in accounting. Deferred revenue is common among software and insurance providers who require up front payments in exchange for service periods that may last for many months. In accrual accounting accrual accounting in financial accounting accruals refer to the recording of revenues that a company has earned but has yet to receive payment for and the revenue is only recognized when it is earned. As a result the unearned amount must be deferred to the company s balance sheet where it will be reported as a liability. Deferred revenue also called unearned revenue is generated when a company receives payment for goods and or services that it has not yet earned.

Deferred revenue is money received by a company in advance of having earned it. The seller records this payment as a liability because it has not yet been earned. The deferred revenue also called unearned revenue is advanced payments made for products and services that will be delivered to the customer at a future date. Deferred revenue is also known as unearned revenue or deferred income it s payment received by a company in advance for services it has not yet provided or goods it has not yet delivered.

This money has not been earned and thus can t be reported on the income statement. Deferred revenue also known as unearned revenue refers to advance payments a company receives for products or services that are to be delivered or performed in the future.