Deferred Expense
/dɪˈfɜːrd ɪkˈspɛns/
Definitions
- (n.) A cost that has been paid but is recorded as an asset because the related benefit will be realized in a future accounting period.
The company recorded the prepaid insurance as a deferred expense to match its use over the policy term.
Forms
- deferred expenses
Related terms
See also
Commentary
Deferred expenses are recognized to comply with the matching principle in accounting, ensuring expenses are matched with associated revenues in legal financial reporting.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.