What is deffered revenue expenditure with examples etc.

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Accepted Answer

Deferred revenue expenditure refers to expenses that are incurred in the current accounting period but are allocated over multiple periods.

Deferred revenue expenditure is an accounting concept where certain expenses are not fully recognized in the current period but are spread over future periods.
These expenses are treated as assets and are gradually written off over the useful life of the asset.
Examples of deferred revenue expenditure include heavy advertisement expenses, research and development costs, preliminary expenses, etc.
For instance, if a company spends a significant amount on advertising for a new product launch, the benefits of that expenditure will be realized over a period of time, and hence, it is considered as a deferred revenue expenditure.
Deferred revenue expenditure is recorded as an asset on the balance sheet and is gradually charged to the profit and loss account over the expected period of benefit.

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