Reading the accounts
Deferred revenue
Also called Unearned revenue
Money already collected from customers for goods or services not yet delivered.
How it works
It sits as a liability because the company owes the customer delivery. Subscription businesses carry large balances of it.
Growth in deferred revenue is a useful forward indicator: it is revenue already contracted and paid for that has not yet been recognised.
Related terms
More in Reading the accounts
- Depreciation and amortisation
- Cost of goods sold
- DuPont analysis
- Cash flow statement
- EBITDA
- Cash conversion cycle
- Earnings growth
- Cash burn
All 51 Reading the accounts terms · The full glossary, 433 terms
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