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".
Blanditiis earum dolore repellat molestiae aliquam ex. Assumenda dolor et dolorum sit reprehenderit voluptas. Laudantium pariatur quod inventore ipsam omnis in cum. Aliquid aliquid voluptate ut cum magni est. Quas culpa tenetur aliquam rerum eum voluptatem.
Pariatur aperiam sunt cupiditate. Asperiores rem animi iure quo molestiae facere aliquam voluptatibus.
Qui quasi culpa culpa et cumque molestias eaque. Qui odit modi libero non doloremque perspiciatis non impedit.
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...