Prepaid expenses are expenses which it has paid in advance for a longer period.
A prepaid expense can be viewed as a claim against someone.
The most common Prepaid expense is when a company pays his rent quarterly in advance.
When this happens it can be said that the company has a claim (interim claim) on the landlord.
Tenant book up the prepaid rent as a prepaid expense, while the landlord book as a deferred income.
In the preparation of financial statements (whether the case of monthly financial statements, halvårsbokslut or helårsbokslut) so you adjust for those deferred costs. These get the assets on the balance sheet.
The most common prepaid expenses:
– rent
– Insurance
– leasing
– annual pass
– abonnemangskostnader