04 August 2009
Prepaid expenditure can be defined as the portion of a payment that relates to the value of services to be received in future accounting periods which will gradually expire or be used up over time. The assessment of prepaid expenditure is an important requirement of accrual accounting. Prepaid expenditure is included as an asset in the financial statements prepared by an entity.
In view of the above items 1) and 2) can be considered for segregating current/prepaid expenditure.
05 August 2009
Hi, Uniform expenditure, digital signature expenditure being misc expenses in nature may not be treated as prepaid expenditure. It is better to write it off in the year of expenditure itself. Uniform may or may not be used for more than 1 year therefore correct way is to treat such items as revenue expenditure.
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