Deferred Revenue & Earnest Money: Timing Is Everything

Neerja Kwatra
Oct 29
1 min read

Revenue recognition shapes how investors and lenders view your income.

Deferred Revenue: Prepaid rent or deposits count as liabilities until earned. Earnest Money: A liability until the deal closes — never record it as income prematurely.

Why It Matters Proper timing avoids inflated income and protects credibility in audits or financing reviews.

Takeaway: Recognition timing is as important as the revenue itself.

⚠️ This blog is for informational purposes only. It may not apply to your specific situation. Please consult your CPA.

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