Deferred revenue

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sandeep (Querist)
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06 November 2010 Hi,

I have one GL 'Deferred Revenue'.

Could you please explain me the purpose of this GL and what are the accounting entries involved in it.

Tilak Agrawal

Tilak Agrawal (Expert)
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10 November 2010 Dear Sandeep

Deferred Revenue Expenditure means the expenditure which is incurred in one period but the benefit of such expenditure would be available for more than one year. Insuch cases Expenditure has to be bifurcated into the number of periods in which the benefit will be there.

e.g Advertisement Expenses -- Rs.1Crore, Period for which Benefit Expected-- 10 Years
Expenditure to be recognised per Year will be 10Lakhs

Same Logic applies with Deferred Revenue Income

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