Prepaid expense: Difference between revisions
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* [[Deferred income]] | * [[Deferred income]] | ||
* [[Expenditure]] | * [[Expenditure]] | ||
* [[Expense]] | |||
* [[Prepayment]] | * [[Prepayment]] | ||
* [[Prepayments]] | * [[Prepayments]] | ||
Latest revision as of 22:19, 14 July 2022
Financial reporting.
An amount paid in advance for a financial benefit, represented by an asset in the organisation's balance sheet.
Example: Venue hire
We book a venue for a function.
And pay 50% of the hire fee in advance.
The 50% paid in advance is an ASSET for us.
We are going to enjoy the use of the venue in future, but it has already been paid for.
So the 50% already paid represents a future economic benefit.
Also known as a prepayment.
