A deferred expense is a cost that has been incurred but not yet recognized as an expense in the financial statements. Instead, it is recorded as an asset on the balance sheet until the expense is recognized in the period in which it will be used or consumed.
For example, if a company pays for a year of insurance upfront, the payment is initially recorded as a deferred expense. Each month, a portion of that payment is then recognized as an expense, reducing the deferred expense asset and reflecting the cost in the income statement.
Deferred expenses help align costs with the revenue they help generate, following the matching principle in accounting.
To create a deferred expense document- Go to Administration > General settings > Enable Deferred expense
Step 2- Create Invoice received- Add the expense which you want to allocate over the months/ period
- Add expense Item-Click on the Create/Cancel deferral option
- A Deferred Expense dialog box appears- fill in the details as required.
- Deferred from/to- You must include the period from when to until when you want to defer these expense.
- Choose the calculation type-If you want to do the calculations monthly, Calendar days or Manually.
- Choose the GL Account-Deferred expense
- Expense GL account-The account through which month end closing will transfer the balance to profit and loss account.
- Expense item-Choose the expense item
The below icon, help you identify if these expense are being for the period or not.
Please note, these deferred expense will not be included to the cost of Invnetory.
- To work Automatically with deferred expenses- Do the month end closing and check the expense values calculated in the deferred expense report from Accounting Module.
I have closed the August and September months therefore the recognized expenses are AED 5000 (10,000/4*2)
- Manual Deferred expense-
To create the calculations manually, Click on expense 
