Deferred revenue expenditure refers to expenses that provide benefits beyond the current accounting year. However, this expenditure does not result in the acquisition of a permanent asset. For instance, introducing a new product to the market requires significant advertising cost. The business reaps long-term benefits from such investments. If revenue expenditure is incurred during the current year but paid as advance for the coming year (s), such expenditure is called ' Deferred Revenue Expenditure '. For example a firm may undertake a special advertising campaign for a new product and say spends rupees one lakh over it. The benefit of this advertisement may continue for say ten ... Deferred Revenue Expenditure It will be easier to understand the meaning of deferred revenue expenditure, if you know the word deferred, which means “Holding something back for a later time”. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived over a number of following accounting periods. These expenses are unusually large in amount and, essentially, the benefits are not consumed within ... Learn how to record deferred revenue expenditure, which are costs that provide benefits over multiple periods. See examples, steps, and reasons for this accounting entry.
