Deferred revenue expenditure
An expenditure, which is revenue expenditure in nature, the benefit of
which is to be derived over a subsequent period or periods is known as deferred
revenue expenditure. The benefit usually accrues for a period of two or more
years. It is for the time being, deferred from being charged against income. It
is charged against income over a period of certain years.
Following are the features of
deferred revenue expenditure:
It is a
revenue expenditure, the benefit of which is to be derived over a subsequent
period or periods.
It is not
fully written off in the year of actual expenditure. It is written off over a
period of certain years.
balance available after writing off (i.e., Actual expenditure - Amount written
off) is shown on the assets side balance sheet.
amount spent on advertising
repairs to plant and machinery