In this video, learn how to manage deferred revenues so that the entries are automatically created periodically.
1. What are deferred revenues?
They are payments made for services that last more than one fiscal year but that we want to record on one date rather than periodically. They are payments that our customers promised to make in several instalments. They are payments made in advance by the customers for goods yet to be delivered or services yet to be rendered. We want to split the total amount into multiple entries recorded periodically. They are assets that we want to take into account over a certain period of time.
2. What does the "Prorata Temporis" option do?
This option doesn't exist at all. This option exists but has nothing to do with deferred revenues. The first entry has the same amount as all the following entries, regardless of the deferred revenue's starting date. The first entry is generated according to the deferred revenue's starting date, with an amount that is proportionate to what is left of the current financial year.