Deferred Revenue Expenditure
Deferred revenue expenditure should be revenue expenditure by nature in the first instance. But its matching with revenue may be deferred considering the benefits to be accrued in future. A thin line of difference exists between deferred revenue expenses and prepaid expenses. The benefits available from prepaid expenses can be precisely estimated but that is not so in case of deferred revenue expenses. For example, insurance premium paid say, for the year ending 30th June, 2015 when the accounting year ends on 31st March, 2015 will be an example of prepaid expense to the extent of premium relating to three months’ period i.e. from 1st April, 2015 to 30th June, 2015. Thus the insurance protection will be available precisely for three months after the close of the Year and the amount of the premium to be carried forward can be calculated exactly Recommended However, it may be noted that accounting issues of specialised nature such as accounting for discount or premium relating to borrowings and ancillary costs incurred in connection with the arrangement of borrowings, share issue expenses and discount allowed on the issue of shares may be deferred for more than one accounting period.
Trial BalancePetty Cash-BookJournalDouble Entry SystemDual Aspect Concept
