bumidan on 11 August 2008
Yup. Deferred revenue normally does not show up on the income statement, just in the balance sheet.
Think of it as a GIFT card. Money is received by retailer (game company), but it is not revenue as they have not sold anything yet.
It is only revenue, when it is redeemed by the customer.
However, the retailer (game company) now owes the amount on the GIFT card, hence it is a liability.
Though they also did received CASH for it, and therefore, it also shows up on the ASSETS of the company.
