Fusion Receivables: Short Term and Long Term Deferred Revenue Accounting
Summary
Fusion Receivables: Short Term and Long Term Deferred Revenue AccountingContent
Client sells a service contract for 2 years.
AR need to book their short term (within 12 months) deferred revenue to a specific account 'X', and book their long term deferred revenue in a different account 'Y'. Below Example in Sep-19.
| Service Contract - 2 years = $12000 | |||
| Year 1 | Year 2 | ||
| Sep-19 | 500 | Sep-20 | 500 |
| Oct-19 | 500 | Oct-20 | 500 |
| Nov-19 | 500 | Nov-20 | 500 |
| Dec-19 | 500 | Dec-20 | 500 |
| Jan-20 | 500 | Jan-21 | 500 |
| Feb-20 | 500 | Feb-21 | 500 |
| Mar-20 | 500 | Mar-21 | 500 |
| Apr-20 | 500 | Apr-21 | 500 |
| May-20 | 500 | May-21 | 500 |
| Jun-20 | 500 | Jun-21 | 500 |
| Jul-20 | 500 | Jul-21 | 500 |
| Aug-20 | 500 | Aug-21 | 500 |
| 6000 | 6000 | ||
| Account | X | Y | |
After a month, Oct-19, 12 months deferred revenue needs to get re-calculated, which means,
Oct-19 Deferred Revenue moves into Recognized Revenue
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