---
title: "Refund liability"
description: "Refund liability — The amount of consideration an entity expects to refund to customers — recorded when the sale is, with revenue reduced by the same amount, and remeasured each period as the estimate changes."
canonical: "https://lopifi.com/glossary/refund-liability"
---

# Refund liability

> Refund liability — The amount of consideration an entity expects to refund to customers — recorded when the sale is, with revenue reduced by the same amount, and remeasured each period as the estimate changes.

Source: https://lopifi.com/glossary/refund-liability
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

---

**What is refund liability?** In accounting, refund liability means the amount of consideration an entity expects to refund to customers — recorded when the sale is, with revenue reduced by the same amount, and remeasured each period as the estimate changes.

## Words this system refuses for it

- returns reserve unqualified
- allowance (an allowance covers credit losses, not returns)

- **Category:** Revenue recognition
- **Specified in:** [Lexicon](https://lopifi.com/md/docs/domain/11-lexicon)
- **Related:** liability, revenue, period, refund