Deferred income and European: Difference between pages

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''Accounting - Financial reporting''.
1.  ''Options.''


Income for which payment has been received by the business but which has not yet been earned.
Referring to the terms of a ''European option'' (also known as a ''European-style option'') exercisable at any time up to its expiry.


Contrasted with an American option.


<span style="color:#4B0082">'''''Example: Five year licence'''''</span>


A customer pays in advance for a five year licence.
2. ''Geography, politics and security.''


We would record the revenue in our income statement spread over the full five years.
Relating to the geographical, political or security areas of Europe.


At the end of the first year 4/5 of the total received from the customer would be Deferred income.


We have a liability / obligation to provide the further four years of service, for which we have been paid in advance.
3. ''European Union.''


 
The term 'European' is sometimes used in a loose - and potentially ambiguous - sense to refer to the European Union or to its institutions.  
Deferred income is recorded as a credit balance in the balance sheet. 
 
(The related accounting entries being DEBIT Cash and CREDIT Deferred income.)
 
 
Deferred income is a liability of the reporting entity to provide the services that the customer has already paid for.
 
 
For reporting presentation purposes it is often aggregated with Accruals as 'Accruals and deferred income'.




== See also ==
== See also ==
* [[Accrual]]
* [[American option]]
* [[Accruals accounting]]
* [[Europe]]
* [[Accrued income]]
* [[European Association of Corporate Treasurers]]
* [[Balance sheet]]
* [[European Bank for Reconstruction and Development]]
* [[Credit]]
* [[European Banking Authority]]
* [[Debit]]
* [[European Banking Federation]]
* [[Financial reporting]]
* [[European Central Bank]]
* [[Liabilities]]
* [[European Customs Union]]
* [[Prepayment]]
* [[European Economic Area]]
* [[Reporting entity]]
* [[European Financial Reporting Advisory Group]]
* [[Revenue]]
* [[European Free Trade Association]]
* [[European Freight Trades Association]]
* [[European Fund and Asset Management Association]]
* [[European Investment Bank]]
* [[European Mentoring & Coaching Council]]
* [[European option]]
* [[European Payments Council]]
* [[European Securities and Markets Authority]]
* [[European Union]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Risk_frameworks]]
[[Category:Financial_products_and_markets]]

Revision as of 01:30, 11 July 2021

1. Options.

Referring to the terms of a European option (also known as a European-style option) exercisable at any time up to its expiry.

Contrasted with an American option.


2. Geography, politics and security.

Relating to the geographical, political or security areas of Europe.


3. European Union.

The term 'European' is sometimes used in a loose - and potentially ambiguous - sense to refer to the European Union or to its institutions.


See also

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