Deferred Revenue: Transactional Triggering Events

This article originally appeared in the May 2025 issue of The Tax Adviser.

Operating businesses in various industries often receive advance payments for goods or services that will be provided in the future, and the presence of deferred or unearned revenue in a balance sheet’s liabilities section is familiar to practitioners. Although tax law does not simply follow the financial statement presentation, the law does allow deferral in certain limited situations. 

Taxpayers engaging in various legal transactions or making certain tax elections need to be mindful of the tax impact — favorable or unfavorable — these rules can have. This article provides a summary of some common deferral provisions and discusses the application of these rules to various situations.

BDO’s Ophair Silver provides details in the full article in The Tax Adviser.