Full formBusiness & Corporate
DLRstands forDeferred Liability for Revenue
Full Form of DLR
What is DLR?
Deferred Liability for Revenue (DLR) is an accounting term used to represent income received in advance by a company, which is not yet recognized as revenue because the associated earnings process is incomplete. Under Indian Accounting Standards (Ind AS), DLR is classified as a liability on the balance sheet and is amortized to the profit and loss account over time as the goods or services are delivered. In India, DLR is commonly seen in industries such as software, construction, and government grants, where payments are received upfront but revenue recognition follows a specific schedule. For instance, when a company receives a government grant for a fixed asset, the grant amount is recorded as DLR and recognized as income over the asset's useful life. This practice ensures compliance with the accrual principle and matching concept. DLR is also relevant in subscription-based services, warranty contracts, and advance rental income. For students pursuing Chartered Accountancy (CA), Company Secretary (CS), or Cost and Management Accountancy (CMA) in India, understanding DLR is crucial for financial statement analysis and audit procedures. It appears in both theoretical and practical exam questions, especially those dealing with revenue recognition and deferred income.
DLR का फुल फॉर्म
आस्थगित राजस्व दायित्व
Example
The builder recorded the advance payments from homebuyers as a deferred liability for revenue (DLR) and will recognize income only after possession is handed over.
DLR — frequently asked questions
What is the full form of DLR?
DLR stands for Deferred Liability for Revenue, an accounting concept where income received in advance is recorded as a liability until it is earned.
How is DLR treated in financial statements under Indian accounting standards?
DLR is shown as a current or non-current liability on the balance sheet and is gradually transferred to the profit and loss account as revenue over the period of performance.