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How is deferred revenue reflected on the cash flow statement?

Deferred revenue, also referred to as unearned revenue, is a liability (current or non-current) that is recorded when the company receives cash from customers but is not yet able to recognize the revenue. The cash flow impact from changes in deferred revenue is reflected in the operation section of the cash flow statement. When deferred revenue increases (i.e. $500 to $1,000), the increase results in a cash inflow, while a decrease results in a cash outflow.

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