Subscription Liability

What is Subscription Liability?

Subscription Liability is what you owe your customers. When a customer buys a subscription by paying a year in advance, then you owe that customer all the issues for that year. We divide what the customer paid by the number of issues and that gives us a value for each issue of the magazine.

Subscription Liability is the value per issue times the number of issues remaining in the subscription.

It is part of the accounting process and affects your revenue and tax summaries.

Subscription Liability is constantly updated.

Each subscription is continually updated. When you publish an issue of your magazine, the number of issues owed each customer is reduced by one. And your liability for delivering the remaining issues of magazines is reduced by the value of that issue (as computed – purchase price divided by the number of issues purchased.