Subscription received in advance is considered a liability because it represents an obligation of the organization to provide services, goods, or benefits to the subscribers in the future. When an entity receives subscription fees from its members or customers in advance of delivering the corresponding goods or services, it creates a liability on its balance sheet.

Here's why subscription in advance is considered a liability:

Unearned Revenue: Subscription revenue received in advance is often referred to as "unearned revenue" or "deferred revenue." This means that the revenue has been collected but has not yet been earned because the services or benefits have not been provided.

Obligation to Deliver: When a company or organization receives subscription payments in advance, it creates an obligation to deliver the subscribed services or goods over a specified period. This obligation to fulfill future promises to customers or members represents a liability.

Balance Sheet Treatment: On the balance sheet, subscription in advance is recorded as a current liability. It appears in the "liabilities" section because it represents an amount that the organization owes to its subscribers until it delivers the promised services or goods.

Recognition as Revenue: As the organization provides the services or goods over time, the subscription revenue is gradually recognized as income in the income statement, matching the revenue with the expenses incurred in delivering the services or goods.

Measurement: The amount of subscription in advance is typically measured at the value received from subscribers. It is recognized as revenue in the income statement in proportion to the services or goods provided over the subscription period.

In summary, subscription in advance is recorded as a liability because it represents an obligation to provide services or benefits in the future. Until these obligations are fulfilled, the unearned revenue remains on the balance sheet as a liability, and it is gradually recognized as revenue when the services or goods are delivered.