Unearned Revenue


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Related to Unearned Revenue: Accrued Revenue, Deferred revenue

Unearned Revenue

Revenue for a company from a project that has not been completed or a product that has not been delivered. A common example of unearned revenue is prepayment for a lease or asset. Unearned revenue is a liability for the company until the project has been completed or the product delivered; at that point, it becomes earned revenue.
References in periodicals archive ?
The company will record the entries shown in Exhibit 6 to reverse the entries shown in Exhibit 1, which initially record unearned revenue.
Thus, when directly converting expenses, prepaid expenses have the same effect on expenses as unearned revenues have on revenues because both represent prepayments (deferrals).
Thus, the retailer would use an unearned revenue account to record the liability associated with gift cards when they are sold.
The net investment in the lease implicitly includes initial direct costs in the minimum lease payment component plus initial direct costs, less unearned revenue.
If a firm receives cash in exchange for a promised future delivery of products or services, it records the increase in cash (an asset account) and the increase in unearned revenue (a liability account).
An excellent example of an unearned revenue is interest payable on a note receivable.
05 in gains related to channel returns estimates and unearned revenue for a net $0.