What is Deferred Revenue Expenditure? Give some examples.

Thank you for your honorable brotheragreed with the answer, Mr. Suleiman.

This is a kind of revenue that is yet to be realized after some time.

As the Word deferred meaning is Holding something back for a later timeThese expenditures incurred in the present accounting period but we get the benefits of these expenditures in portions later on...Same like advertisement expenditure... We get customer not only the current period but also the later on ...Thanks

 

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 the same accounting period.

examples 

advance payment for goods and services like in the maitenance contracts

 

Hello Dear

this expenses pay now and serving more than one accounting cycles . Example

advertisement  and establishment expenses

While revenue expenditure is a simple concept, deferred revenue expenditure is slightly more complicated. In this case, the value received from the expenditure is not immediate. Buying a training program may add skills to office labor forces over just a few days, but not all effects occur so quickly. Sometimes the benefit is delayed over months or even years. In this case, the business creates a deferred revenue expenditure account to match up the expense with the value received, similar to depreciation accounts but for a different set of activities.

 

Examples

 

A common example for deferred revenue expenditures is in marketing. Advertising, according to many theories, has a delayed effect. This means that the business can spend money on an advertising campaign, but not realize increased sales until several months down the line when customers absorb the full impact of the ads. Some theories disagree that advertising is so delayed, but if the business accounts for it then it will create a deferred revenue expenditure account in order to match up the delayed value with the amortized costs of the advertising.

Deferred Revenue expenditure is sn 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 usually large in amount, and essentially, the benefits are not consumed within the same accounting period _Examples: *A large amount on advertising in The current accounting period fir a new product *A natural disaster or fire may also treated the same

Dear Joseph, it's an expenditure that has the attribute of a revenue and such must be incurred during an accounting period and its revenue will be earned over a number of accounting periods e.g Heavy advertisement expenditures