Deferral

Deferral

Deferred, in accrual accounting, is any account where the asset or liability is not realized until a future date (accounting period), e.g. annuities, charges, taxes, income, etc. The deferred item may be carried, dependent on type of deferral, as either an asset or liability. See also accrual.

Unfortunately, the term deferral is also often used as an abbreviation for the terms deferred expense and deferred revenue that share the common name word, but they have the opposite economic / accounting characteristics.

• Deferred expense: Expense is recognized after cash is paid out.
• Deferred revenue: Revenue is recognized after cash is received.