Separating future revenues from current revenues increases the overall transparency

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Thirdly, DBP helps the company to better plan production and cash flows. When funds are distributed over periods, it is easier for management to keep records, analyze documents and estimate how much real income will be received in the current period. This will help to obtain an objective financial result .

After all, if you take into account and accrue income from future periods in this one, this will affect the final indicators and unreasonably inflate them.


of accounting (including taxes). Partners, investors, and creditors see what is norway phone number list really happening within the organization from a financial perspective, rather than one-off spikes and accruals of income from prepayments.

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What is related to DBP
Not all receipts can be attributed to future income. There are differences between, for example, estimated income and DBP. Let's compare two similar situations.

1) The company signed a contract for a long-term project, which expects regular receipt of money from the client during the year to implement the adopted program.

2) A company renting out office space entered into a long-term lease agreement with a tenant and received payment for 12 months at once.

What income is related to the future period? Answer: only the second point.