2 min read
Definition
Deferred income (deferred revenue) is payment received in advance for goods or services a company has not yet supplied. Under the accruals basis it's held as a liability and recognised as income only when the obligation is fulfilled.
In plain terms
The cash is yours to hold, but you haven't earned it until you deliver — so it counts as something you owe, not profit.
Why it matters for your company
Deferred income means your bank balance can overstate your position — some of that cash is owed as future delivery. See how to read your cash position.
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