Deferred Revenue (SaaS)
Definition
Payments received in advance for software or services not yet delivered, recorded as a liability and recognised as revenue over the subscription period. It is central to subscription accounting.
Related Terms in Financial Analysis
Weighted Average Cost of Capital (WACC)
The average rate a business pays to finance its assets, weighting the cost of equity and the cost of debt by their share of total capital. It is the common benchmark return used to evaluate investments.
Cost of Equity
The return shareholders require for investing in a business, reflecting its risk. It is a key input to WACC and to valuing a company's equity.
Cost of Debt
The effective interest rate a business pays on its borrowings, usually considered after tax because interest is generally tax-deductible. It feeds into the weighted average cost of capital.
Discounted Cash Flow (DCF)
A valuation method that estimates the value of an asset or business as the present value of its expected future cash flows, discounted at a rate reflecting their risk and the time value of money.
Stop memorising terms — let HelloBooks do the work
AI-assisted bookkeeping that handles invoicing, GST, reconciliations, and reports automatically. Free to start.