[calicpa]

What is the difference?

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[ZSRizvi]

Unearned revenue = think of customers giving you advances for services you haven't performed (liability).

Deferred revenue = think of the installment sales method. If collection isn't reasonably assured, then you have to recognize the revenue over a period of time (usually based on cash collections).

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[ZSRizvi]

Unearned revenue = think of customers giving you advances for services you haven't performed (liability).

Deferred revenue = think of the installment sales method. If collection isn't reasonably assured, then you have to recognize the revenue over a period of time (usually based on cash collections).

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[calicpa]

Isnt what you are describing deferred gross profit? which is a contra to a/r. but deferred revenue is a liability.

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

Isnt what you are describing deferred gross profit? which is a contra to a/r. but deferred revenue is a liability.

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[ZSRizvi]

LOL. Oh man I'm so sorry; I was thinking of deferred gross profit (this is what happens when you study 12-16 hours a day and nothing makes sense anymore).

Okay, no; there's no difference between unearned/deferred revenue. As far as I know, it's just different terminology.

Sorry about that!

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[ZSRizvi]

LOL. Oh man I'm so sorry; I was thinking of deferred gross profit (this is what happens when you study 12-16 hours a day and nothing makes sense anymore).

Okay, no; there's no difference between unearned/deferred revenue. As far as I know, it's just different terminology.

Sorry about that!

BEC (July 2013)
FAR (OCT 2013)
REG (NOV 2013)
AUD (JAN 2014)

The CPA Exam is an opponent that not even the Fellowship of the Ring would want to come across.

I have a long...long...journey ahead of me.

[calicpa]

yep i know how that goes!

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

yep i know how that goes!

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[acamp]

Deferred Revenue and Unearned are the same thing, IIRC. You defer revenue you have not earned…

Think magazine subscription, can only recognize revenue as the the magazines are shipped–but the customer already paid!

I had a client who bundled a lifetime online service (which they previously sold independently, but not on a lifetime basis) with their hardware product. Had to determine

a. how much of the bundled sale was attributable to the online service

b. the estimated useful life of the online service, ie: its lifetime, but how long will people actually use it for?!

It ended up being 8 years for a number of reasons and about $80 dollars of every sale was considered online software. Its recognized at $80/8, or $10 of revenue per year.

Sell $500 unit

Dr. Cash $500

Cr. Revenue $420

Cr. Deferred Revenue $80 (liability account)

Every year

Dr. Deferred Revenue $10

Cr. Revenue $10

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[acamp]

Deferred Revenue and Unearned are the same thing, IIRC. You defer revenue you have not earned…

Think magazine subscription, can only recognize revenue as the the magazines are shipped–but the customer already paid!

I had a client who bundled a lifetime online service (which they previously sold independently, but not on a lifetime basis) with their hardware product. Had to determine

a. how much of the bundled sale was attributable to the online service

b. the estimated useful life of the online service, ie: its lifetime, but how long will people actually use it for?!

It ended up being 8 years for a number of reasons and about $80 dollars of every sale was considered online software. Its recognized at $80/8, or $10 of revenue per year.

Sell $500 unit

Dr. Cash $500

Cr. Revenue $420

Cr. Deferred Revenue $80 (liability account)

Every year

Dr. Deferred Revenue $10

Cr. Revenue $10

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[Author]

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