Okuzeka
Accounting & Tax vocabulary · Assets, Liabilities & Equity

Deferred revenue

Meaning in accounting & tax, with examples

nounCommon term

In accounting & tax, deferred revenue means: Money received from customers for goods or services not yet delivered. It is recorded as a liability until the company has earned it.

In Turkish: ertelenmiş gelir, gelecek aylara ait gelirler, alınan avanslar

How it is used

Common in subscription and software businesses. Also called unearned revenue or, under IFRS 15, a contract liability. It is moved to revenue over time as the service is provided.

Example sentences

  1. Annual subscriptions paid upfront are booked as deferred revenue.

  2. Deferred revenue went up because many customers renewed early.

Common collocations

  • unearned revenue
  • contract liability
  • release deferred revenue
  • deferred income
  • revenueThe income a business earns from its normal activities, mainly from selling goods or services, before any costs or expenses are deducted.
  • prepaid expenseA payment made in advance for goods or services that will be used in a later period, such as a year's insurance, recorded first as an asset.
  • accrualAn amount recorded in the period it belongs to, even though cash has not yet been paid or received, such as a utility bill that only arrives next month.
  • liabilityAn amount a business owes to others, such as suppliers, banks, employees or the tax office, which it will have to settle in the future.

More terms: Assets, Liabilities & Equity

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This page explains English vocabulary for learners. It is not financial advice.