what is meant by deferred revenue expenditure?
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Answer / guest
Deferred revenue expenditure is a revenue expenditure whose
benifits spread more than one year.
Ex:heavy expenditure on advertisement
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Answer / m.l.verma
Suppose we have expense 200000/- expense on advertisement and we will get crediblity profit of advertisement for four year. then we will get show Rs 50000/
as Advertisement A/c in profit & loss A/c as current year expenses. And Balence of 150000/ will be shown in balance sheet in assets side. Next year Again 50000/-will be in profit & loss A/c and 100000/-in Balance sheet and so on upto amount adjusted.
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Deferred revenue is important because it's the money a
company collects before it actually delivers a product. For
example, a software company sells and receives payment for
a computer program before it gets delivered or installed.
This doesn't get recorded as straight revenue because, if
something goes wrong with the job, the money is at risk.
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