Definition
Contract Liability – Cash already collected (or, for a games publisher, virtual-currency purchased) for a product or service the company hasn't yet delivered, booked as a liability rather than as revenue until the underlying obligation is fulfilled. For a live-service game, players buy in-game currency or items upfront but "consume" them over weeks or months, so revenue is recognized gradually as that balance is drawn down — meaning a quarter's GAAP revenue can lag well behind the actual cash a company took in, and a rising deferred-revenue balance can make gross-billings-style non-GAAP measures grow much faster than statutory revenue in the same period. Found In: Balance Sheet (liabilities), Notes to Financial Statements (revenue recognition)