1
$\begingroup$

Why is "Deferred revenue" treated as a non-monetary liability during temporal method FX translation while "Accrued Expenses" is treated as a monetary liability?

$\endgroup$
3
$\begingroup$

Deferred Revenue arises when the contract between you and your customer requires the customer to pay in advance of your delivering your products or services. i.e. you've been paid, now you owe the customer the work!

Accrued Expenses represent expenses for which you will be reimbursed in the future. i.e. you are or will be owed money.

$\endgroup$
0
$\begingroup$

Very interesting question Mr. Sundar. The reason for considering deferred revenue as a non-monetary liability is primarily because this liability is created out of a cash receipt from a customer for a service/product which is not yet delivered. Now since the cash is already received the liability is no more monetary. Hope you got the logic!

Cheers! AJ

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.