Deferred Expense Law and Legal Definition

Deferred expense refers to a cost incurred by a business when the business expects to benefit from that cost over a period beyond the current year. It is a prepaid subscription to a business periodical, whereby, the cost of which will be recognized as an expense over a multiyear subscription period. The very purpose of allowing a deferred expense is to provide an opportunity for recovery in a future rate proceeding. In Gulf States Utils. Co. v. Louisiana PSC, 676 So. 2d 571, 577 (La. July 2, 1996), it was held that the allowance of deferred expenses is a limited exception to the general rule that expenses and revenues must be matched.