Unearned revenues are revenues not recorded as revenues until services are performed. revenues for services already performed an
d received in cash, and recorded as revenues when received. revenues for services performed but not yet received in cash or recorded. revenues for services already performed, and recorded as liabilities, before they are received.
Unearned revenue are revenue earned against services that have not been performed yet. In accrual system, revenue is recognized when service is performed against it.
Revenue earned without service being discharged is treated as liability till the period service is performed. It is recognized as income only after service is performed. For example unearned rent revenue is an unearned revenue which is reported as a liability till the rent period for which revenue was received is over.
The extent to which the value of the firm would be effected by unanticipated changes in exchange rates reduces as the difference between a foreign currency’s inflows and outflows reduces also and vice-versa.
