Deferred revenue

Deferred revenue

Deferred revenue (unearned revenue or deferred income) is a liability representing cash received for goods or services that will be delivered in a future accounting period. Once the income is earned, the corresponding revenue is recognized, and the deferred revenue liability is reduced. Unlike accrued expenses, where a liability is an obligation to pay for received goods or services, deferred revenue reflects an obligation to deliver goods or services for which payment has already been received.