What is the accounting treatment of deferred income in the following year?
Md Ariful Islam
বিএসসি(সিএসই)
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এমবিএ(মার্কেটিং)
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Dr. Md Rushad Rahman
এমবিবিএস(আরপিএমসি)
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পিজিটি(মেডিসিন)
The deferred revenue initially recorded remains on the balance sheet until it is fully earned. Therefore, the deferred income will continue to be recognized in the following year as it is actually earned, and the balance in the deferred revenue account will be reduced as revenue recognition takes place. Maintaining the deferred revenue account on the balance sheet as a liability allows the company to carry the unearned portion over to the following year so it can be recorded where it belongs.
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