16L. Financial Statement Disclosures – Deferred Revenue

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Deferred revenue (also known as unearned revenue) can arise from several types of transactions, including:

  • Deposits received on real estate sales which are insufficient to fully recognize a sale under GAAP (e.g., less than 10 percent for multi-family residential property, or 20 to 25 percent for undeveloped land) resulting in use of the cost-recovery method, the installment method, the reduced profit method, or percentage-of-completion method
  • Fees or grants for services received prior to completion of the earnings process
  • Rents received prior to the period earned
  • Deferred developer fees

This paper discusses deferred revenue situations and provides sample disclosure language for several scenarios.

Author: Chelsea Maupin

Güd Marketing - Strength Matters Communications

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