Unearned Revenue

You sign a deal to build a yurt subdivision in suburban Houston (they are becoming very popular there). The developer pays you $3 million upfront. However, since you haven't actually done the work yet, you can't book that $3 million as revenue. If the developer backs out of the plan before construction begins, you'd have to return the $3 million.

As such, it appears on your financial statements as a liability (essentially, it sits there as a non-interest loan). The technical term for this type of liability: unearned revenue. Once construction begins, you no longer have any danger of having to return the money. Therefore, you can move the funds to the revenue part of your records. At that point, it has become earned revenue.