Deferred revenues, also known as unearned revenues, represent payments received by a company for goods or services yet to be delivered or performed. This accounting concept is crucial as it ensures that income is recognized in the period it is earned, aligning with the accrual basis of accounting. When a company receives payment in advance, it records it as a liability on the balance sheet, reflecting the obligation to deliver future goods or services. As the company fulfills its obligations, the deferred revenue is gradually recognized as actual revenue, ensuring accurate financial reporting.