Accounting: Deferral and Prepaid Expenses

Defferal

• Defferal is the postponement of recognizing an expense that has been paid or revenue that has been received
• Deferred expenses are categorized into two types:
  • Beban dibayar dimuka (Prepaid Expense): short-term expenses that are expected to benefit the business for a short period, listed as Current Assets on the Balance Sheet
  • Beban yang ditangguhkan (Deferred Charges): long-term expenses that can be allocated to operations over several years, listed as a separate section on the Balance Sheet

Deferred Revenue

• Deferred Revenue is revenue that has been received but not yet earned
• It can be listed on the Balance Sheet as a current liability, also known as:
  • Pendapatan yang belum dihasilkan (Unearned Revenue)
  • Pendapatan diterima di muka (Revenues Received in Advance)
• Long-term deferred revenue is listed as a separate section on the Balance Sheet, known as Kredit yang ditangguhkan (Deferred Credits)

Accrued Expenses

• Accrued Expenses are expenses that have been incurred but not yet paid
• They are listed on the Balance Sheet as a liability, known as:
  • Kewajiban yang masih harus dibayar (Accrued Liabilities)
• Accrued liabilities typically fall due within a year and are listed as Current Liabilities

Accrued Revenue

• Accrued Revenue is revenue that has been earned but not yet received
• It can be listed on the Balance Sheet as an asset, known as:
  • Aktiva yang masih harus diterima (Accrued Assets)
• Accrued assets typically fall due within a short period and are listed as Current Assets

Defferal (Penangguhan)

• Defferal is the delay in recognition of an expense that has been paid or revenue that has been received
• Expenses that are expected to be beneficial for a short period are recorded in the Balance Sheet under Current Assets as Prepaid Expense (Beban Dibayar Dimuka)
• Long-term prepaid expenses that can be allocated to several years' operations are presented in the Balance Sheet under Deferred Charges (Beban yang Ditangguhkan)

Deferred Revenue (Pendapatan yang Ditangguhkan)

• Deferred Revenue is recorded in the Balance Sheet as a current liability, also known as Unearned Revenue (Pendapatan yang Belum Dihasilkan) or Revenue Received in Advance (Pendapatan yang Diterima di Muka)
• Long-term deferred revenue is presented in the Balance Sheet under Deferred Credits (Kredit yang Ditangguhkan)

Accrued Expenses (Beban yang Masih Harus Dibayar)

• Accrued Expenses are recorded in the Balance Sheet as liabilities that are still to be paid (Accrued Liabilities)
• These liabilities usually have a short-term maturity period and are classified as Current Liabilities

Accrued Revenue (Pendapatan yang Masih Harus Diterima)

• Accrued Revenue is recorded in the Balance Sheet as assets that are still to be received (Accrued Assets)
• The amount of receivables for Accrued Revenue usually has a short-term maturity period and is classified as Current Assets