When is the revenue from a deferred revenue membership recognized as income?

Revenue from a deferred revenue membership is recognized as income when the service is delivered or the job associated with the membership is marked as complete. This aligns with the revenue recognition principle, which dictates that revenue should be recognized when it is earned, which typically occurs once the service has been provided to the customer. By marking the job as complete, the business acknowledges that it has fulfilled its obligation under the terms of the membership, thereby allowing for the recognition of that revenue as income.

The other timing options do not align with the revenue recognition principle. For instance, recognizing revenue at the time of membership purchase would not accurately reflect when the service was rendered. Similarly, recognizing revenue when billing runs are processed does not take into account whether the service has actually been provided. Lastly, waiting until the end of the membership term would delay recognizing revenue until all services have been fully rendered, which can lead to inaccurate financial reporting and does not match the income with the relevant period of service provided.