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Deferred Charges

Deferred charges are expenditures for items that will benefit future periods beyond one year from the balance sheet date; for example, costs for introduction of a new product to the market or the opening of a new location.

Deferred charges are similar to prepaid expenses, but are not included in current assets because the benefits from such expenditures will be reaped over periods after one year from the balance-sheet date.

Additional Comments:

To "defer" means to put off or postpone to a future time.

The expenditure incurred will be gradually written off over the future period(s) that benefits from it, rather than fully charged off in the year payment is made.

Related Terms:

Balance Sheet
The balance sheet, also called statement of financial position, portrays the financial position of the public ...

Trading Securities
Stock or bond holdings that a company intends to sell within a short period of time ...

Fiscal Periods
Because not all companies have the same fiscal year end, we, in cooperation with I/B/E/S, use ...

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