Deferred Expense

A deferred expense is a cost that has been incurred but not yet consumed. This cost is termed as an asset until and unless underlying goods & services are consumed.

Deferred expenses reflect on the balance sheet as a non-current asset.  Deferred expenses are rent, supplies, insurance etc.

An expense termed as a deferred expense if the consumption duration of purchased goods & services exceeds one year limit.

An expense termed as a prepaid expense if the purchased goods & services consumed within a year.

 

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