ACC201 Week 2 Discussion 2 Analyze Netflix’s Accrual and Deferral Accounts

Discuss the differences between these accrual and deferral accounts.

Hello Classmates ,

The difference between accrual accounts and deferral accounts is that: Accrual accounts is recognizing the  measures of  the performance and position of a company by recognizing economic events regardless of when cash transactions occur. Deferral account is to delay recognizing certain revenues or expenses on the income statement until a later or  more appropriate time. For an example revenues are deferred to a balance sheet until they are earned in a later period . Accrual examples are also interest revenues and accounts receivable .

Looking at the 2018 Netflix Consolidate balance sheet

Accrued type accounts (in thousands) as of December 31,2018

Accrued expenses $477,417

Content Liabilities $4,686,019

Long term debt $10,360,058

Deferrals in thousands as of December 31,2018

Other non-current assets - $901,030

Current content assets - $5,151,186

Non-current content liabilities – $3,759,026

Property and equipment - $418,281