What is meant by deferred charges?
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Last modified 9/23/2020 12:20:20 PM EST |
Added by ExpressTaxExempt Team
Applicable To
990-PF
990-N
990-EZ
990
8868
1120-POL
Deferred charges are long term prepaid expenses that are carried as assets on the balance sheet until used. They usually emerge from a business making payment for goods or services that have not been received yet.
Suppose if you are prepaid an amount by an organization to deliver goods for them in the future, the paid amount can be taken into account as deferred charges even before the goods have been delivered yet.