Companies selling subscriptions, insurance, or items with down payments are all examples of businesses that may record deferred revenue. Deferred revenue is a line item on a company's balance sheet.

In subscription-based industries with software services, prepaid service agreements, and professional retainers, deferred revenue can be a significant part of a company's operations. For example ...

Once the goods and services are rendered, the company transfers the proportionate amount of deferred revenue to actual revenue, reflecting earned income on the income statement. As an example ...

Running a business highlights the complexity of the tax code, making deferred tax assets (DTAs) challenging yet essential for minimizing tax liability.