RE:RE:Deferred revenueFusaichi777 wrote: Freelunch5: where did you find these numbers on q2 report?
You can find it under liability on Balance Sheet.
When a company uses the accrual accounting method, revenue is only recognized as earned when money is received from a buyer, and the goods or services are delivered to the buyer. When a company accrues deferred revenue, it is because a buyer or customer paid in advance for a good or service that is to be delivered at some future date.
The payment is considered a
liability because there is still the possibility that the good or service may not be delivered, or the buyer might cancel the order. In either case, the company would repay the customer, unless other payment terms were explicitly stated in a signed contract.
Over time, when the product or service is delivered, the deferred revenue account is debited and the money credited to revenue. In other words, the revenue or sale is finally recognized and, therefore, the money earned is no longer a liability. Each contract can stipulate different terms, whereby it's possible that no revenue can be recorded until all of the services or products have been delivered. In other words, the payments collected from the customer would remain in deferred revenue until the customer has received what was due according to the contract.