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Deferred Revenue

Money received before the goods or services have been delivered.

Area
Accounting
Also known as
unearned revenue, customer deposits
In this area
51 terms of 257

Deferred revenue is a liability, not income: the customer has paid but you still owe them something. It is recognised as revenue only as delivery or service occurs.

Deposits, annual subscriptions and prepaid maintenance all create it. Treating that cash as revenue on receipt overstates performance and leaves the obligation invisible.

Related terms

Accrual Accounting

Recognising income and expenses when they are earned or incurred, not when cash moves.

Prepaid Expense

A payment made in advance for benefit not yet received.

Invoice

A seller’s itemised request for payment for goods or services.

Accounts Receivable

AR

Money owed to your business by customers for sales made on credit.

More in Accounting

Accounts Payable (AP) Accrued Expense Aging Report Bad Debt Provision Balance Sheet Bank Reconciliation Break-Even Point Budget Variance

Deferred Revenue is not just a definition here

Accounting runs on this vocabulary every day in AWRA OpsHub — 51 of our 257 glossary terms describe things the platform actually does.

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