I assume that the term deferred asset refers to a deferred charge or a deferred debit. A deferred charge is reported on the balance sheet in the long-term asset section other assets.

An example of a deferred charge is bond issue costs. These costs include all of the fees that a corporation incurs in order to register and issue bonds. The fees are paid near the time that the bonds are issued but they will not be expensed at that time. Rather, the bond issue costs are initially deferred to the long-term asset section of the balance sheet. Then in each year of the life of the bonds, a portion of the bond issue costs will be systematically moved from the balance sheet and will appear as an expense on the income statement. The process of systematically reducing this deferred charge is known as amortizing the bond issue costs.

Learn more about Bonds Payable.

About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

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