Deferred revenues +10 on the FS
Hi, I had my first itw in a big BB today and i had the following :
"What happens if we have +10 in deferred revenues on the financial statements ?"
I answered :
- Nothing on the P&L because income is not recognized (concept of prudence ?)
- Nothing on the CF because of 0 impact on P&L
- Asset : +10 in cash equivalent Liability : +10
The interviewer seemed to agree I've seen an awful lot of very different answers on the forum, so I'm a bit confused and I'd like to get to the bottom of it.
P&L: nothing
CF: DR +10
BS: Cash +10, DR +10
Thanks !
For those who do not understand at all where the cash is added to the CFS (like me 5 min ago), it is very well explained here:
https://www.fool.com/knowledge-center/does-deferred-revenue-go-on-the-c…
You just add an entry for "Other cash from operations".
Et officia quia ipsam quis. Incidunt ut maiores voluptatem repudiandae non tempore.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...