#deferred-revenue
Deferred revenue, advance billing, and revenue recognition timing for subscriptions, memberships, and prepaid services
Under ASC 606, a payment gap over one year splits interest from revenue: advance payments accrete interest expense, deferred billing earns interest income.
Cost recovery books zero profit until cash covers your cost — the most conservative revenue method, for sales too shaky for installment treatment.
Functional IP licenses recognize revenue at grant; symbolic IP spreads it over the term — plus the royalty exception and minimum guarantees under ASC 606.
ACV annualizes one contract, TCV totals its full term, ARR run-rates every customer — and revenue recognizes only as service is delivered.
Verisign earned $212.6M on $443.0M revenue (+5.7%) in Q3 2026; the .com/.net base grew 6.1% to 182.5M and a $171.4M .web intangible opened its second act.
Fixed fee puts scope risk on you; time and materials puts it on the client — a not-to-exceed cap splits the difference. Match the model to scope certainty.
Accruals book revenue and expenses before cash moves; deferrals hold cash on the balance sheet until earned or used.
Accrued revenue is earned-but-unbilled income (an asset); deferred revenue is unearned cash (a liability) — each clears with its own adjusting entry.
Annual SaaS billing cuts churn far below monthly rates and pulls a year of cash forward — but prepayments are deferred revenue, not day-one income.
Book each Stripe dollar once as gross revenue when earned; route fees and refunds through a clearing account and treat payouts as transfers, never income.
Stripe payouts are net cash transfers, not revenue — book annual prepayments to deferred revenue and recognize one-twelfth monthly.
Upgrades and downgrades reallocate future revenue, never the past — reconcile billing to books monthly with a deferred-revenue rollforward.
