What Is Deferred Grant Revenue

Deferred revenue, also known as unearned revenue, refers to advance payments a company receives for products or services that are to be delivered or performed in the future. … As the product or service is delivered over time, it is recognized proportionally as revenue on the income statement.

What is deferred revenue with examples?

Deferred revenue represents payments received by a company in advance of delivering its goods or performing its services. … If the magazine company sells a monthly subscription at a single payment of $12 a year, the company earns a deferred revenue of $1 for each month it delivers a magazine to its customers.

Is deferred revenue a good thing?

When deferred revenue may be beneficial Loans, after all, impact a business’s credit and may make them less attractive to investors. This practice may be more practical for particular businesses. A business that’s using deferred revenue to make capital investments can run into trouble.