"Revenue" is an excellent example of a word that confuses people. How can it be that the $400 million in deposits Tesla has received for its upcoming Model 3 does not represent revenue?
Because money is not Revenue and Revenue is not money.
Revenue is recognized when - and only when - a sale is made, irrespective of whether any money changes hands.
Any Revenue recognized from the future sale of Tesla Model 3s will be counted as such at that time - when the sale is completed and the car is delivered to the customer.
Until that occurs these deposits are accounted for in two places on Tesla's balance sheet: 1) as assets represented by cash in the bank and; 2) as liabilities represented by obligations owed to customers.
But you will not find any deposits on the income statement listed as Revenue.
So, in fact, Revenue is not money.
This one disconnect - the incorrect definition of Revenue - is perhaps the most pervasive and destructive misunderstanding in all of accounting.