Accounting
Deferred Revenue
Quick definition
Cash received in advance of delivering the service.
Deferred revenue (a liability) represents cash collected for services not yet delivered — like an annual SaaS subscription paid upfront. Revenue is recognized over time as the service is provided, under ASC 606.
Related accounting terms
ASC 606
GAAP revenue recognition standard for contracts with customers.
ASC 718
GAAP rules for expensing stock-based compensation.
ASC 842
GAAP standard requiring leases to be recognized on the balance sheet.
Accrual vs. Cash Accounting
Accrual recognizes revenue/expense when earned; cash when money moves.
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