I know that due to GAAP accounting, revenues are recognized on the basis of how often the payment is due. The rest is compiled into deferred revenues. Thus, is it reasonable to add back deferred revenues to sales?

Revenues are booked when services are provided, or a control is handed over to the client, such as fulfillment of service contacts, on a periodic schedule (such as monthly), or some other measurable way, not when payment is due. A/R goes up when billed, down when cash is received. has no effect on the revenue booked on the income statement. Many software firms take prepaid revenue (deferred revenue) which represents an obligation to provide a future service or product, a liability, in relation to a cash asset. you should book deferred revenue inline with revenue recognition.

Software Industry Equity Analysis: Do you add back Def. Rev?

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Software Industry Equity Analysis: Do you add back Def. Rev?

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