k***a
发帖数: 87 | 1 Deferred Revenue refers to payment received for work not yet performed.
In this case, the system design company probably signed a contract to perform
some sort of design for a client, and the client has made some payments to the
company, but the company has yet to perform the work outlined in the contract,
or it has yet to complete all the work, so it is deferring the recognition of
that revenue until all the work has been completed.
So this amount is considered a liability until it becomes rele | k***a
发帖数: 87 | 2 Right =)
One reason a company may choose to defer their revenue is to lower their
income and thus their taxes... so if they could recognize a revenue over a
number of years, then they will avoid paying a large amount of taxes at
once... thus smoothing out their operating results.
plus
computer | l*o
发帖数: 36 | 3 this is wrong, if I am not mistaken. IRS is impatient to collect taxes
so they don't give a damn about your accrual or deferral method of revenue
recognition. They use cash method so once you get paid from client, you
pay tax on it. As to the company, since it only recognizes tax expense
according to its current-period financial results, IRS' cash-method rule
won't really affect its operating results. The difference is what they call
deferred tax asset. The smoothing thing is thus irrelevant.
in
【在 k***a 的大作中提到】
: Right =)
: One reason a company may choose to defer their revenue is to lower their
: income and thus their taxes... so if they could recognize a revenue over a
: number of years, then they will avoid paying a large amount of taxes at
: once... thus smoothing out their operating results.
:
: plus
: computer
| k***a
发帖数: 87 | 4 let me clarify then... I am talking about smoothing as in Financial Reporting,
not for tax purposes... of course, the IRS would not care about your method of
collection.
current-period
though),
【在 l*o 的大作中提到】
: this is wrong, if I am not mistaken. IRS is impatient to collect taxes
: so they don't give a damn about your accrual or deferral method of revenue
: recognition. They use cash method so once you get paid from client, you
: pay tax on it. As to the company, since it only recognizes tax expense
: according to its current-period financial results, IRS' cash-method rule
: won't really affect its operating results. The difference is what they call
: deferred tax asset. The smoothing thing is thus irrelevant.
: in
| l*o
发帖数: 36 | 5 to defer unearned revenue or not is not an option you can "choose" if you
wanna follow GAAP. Having that said, no matter u defer or not, you can't
"avoid" paying your tax due at once.
【在 k***a 的大作中提到】
: let me clarify then... I am talking about smoothing as in Financial Reporting,
: not for tax purposes... of course, the IRS would not care about your method of
: collection.
:
: current-period
: though),
| k***a
发帖数: 87 | 6 Actually you CAN... it's not really "choosing." There is room within GAAP for
that... otherwise such a category may not exist.
There are lots of tax/valuation consultants that make a living out of helping
companies figure out just this sort of thing.
Reporting,
method of
revenue
call
but
consideration
【在 l*o 的大作中提到】
: to defer unearned revenue or not is not an option you can "choose" if you
: wanna follow GAAP. Having that said, no matter u defer or not, you can't
: "avoid" paying your tax due at once.
|
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