Question

what is deferred revenue expenditure?​

Answer 1

Answer:

Hope this answer helps you!

Explanation:

Deferred revenue, also known as unearned revenue, refers to advance payments a company receives for products or services that are to be delivered or performed in the future.

Answer 2

ANSWER :

❖ Deferred Revenue Expenditures :-

Deferred Revenue Expenditures are the expenditures which are revenue in nature, but the benefit of those expenditures is likely to accrue to the entity incurring such expenditures.

• In other words, there are some expenditures incurred, which by nature are revenue expenditures, but its benefits are likely to be derived over a number of years. Such expenditures are termed as Deferred Revenue Expenditures.

• It can be considered as a type of revenue expenditure which is incurred during the accounting period but is applicable either wholly or in part to future periods.

• Such expenditures are termed as 'Deferred', because the revenue recognition of such expenditures are deferred and recognized over the period during which the benefit of such expenditures is likely to accrue. Generally such period are considered between 3 to 7 years.

• Deferred Revenue Expenditures cannot be transferred to Profit and Loss Account of a particular year and are deferred over a number of years so that profit of a particular year is not unduly affected.

❖ Some examples of Deferred Revenue Expenditures are :-

• [1] Heavy expenditures on special advertising campaign or for launching a new product.

• [2] Expenses incurred for removal of factory from one place to another including the cost of dismantling as well as re-installing of plant and machinery.

• [3] Heavy expenditure on Research and Development incurred in a particular year.

• [4] Preliminary expense of a Limited Company.

• [5] Brokerage and Cost of issue of shared or debentures or both by a Limited Company.