Deferred expenses and prepayments (also known as prepaid expense), are both costs that have already occurred for unconsumed products or services yet to receive. #odooaccounting
Such costs are assets for the company that pays them since it already paid for products and services still to receive or that are yet to be used. #odoo16
The company cannot report them on the current Profit and Loss statement, or Income Statement, since the payments will be effectively expensed in the future. #odoofunctionalvideos
These future expenses must be deferred on the company’s balance sheet until the moment in time they can be recognized, at once or over a defined period, on the Profit and Loss statement.
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