When you use deferred accounting rules, the Revenue Recognition program creates a single distribution per line that posts to an unearned revenue GL account. You can use deferred accounting rules only for invoices that are assigned the Bill in Advance invoicing rule. If the invoicing rule on a transaction is Bill in Arrears, the Revenue Recognition program ignores the deferred flag. You can later earn the revenue using the Revenue Accounting feature.

If you use a deferred accounting rule with a single accounting period, Receivables recognizes the revenue in the period that you specify with the Revenue Accounting wizard. If you use a deferred accounting rule with multiple accounting periods,
Revenue Accounting creates the revenue recognition schedule based on the rule, and the start date is determined by the GL start date that you entered using the Revenue Accounting wizard.

If you use a non–deferred accounting rule with multiple accounting periods, Revenue Accounting uses the schedule created by the Revenue Recognition program. If an accounting period is closed, Revenue Accounting posts that portion of revenue into the subsequent open accounting period.

The tables below illustrate the difference between deferred and non–deferred rules.
This table illustrates what happens when you have a $300 invoice with a 3 month deferred rule and an original start date of February 2. In this example, all periods are open.