A cost that has already been incurred by an entity, but which corresponds to more than one financial period, and hence will not be charged in whole to the income statement for the particular period during which it is incurred. The portion relating to future periods will appear on the balance sheet as an asset. Deferred cost is considered outgoings that will carried forward as an asset for amortization with the passage of time, i.e., over the span of multiple periods.

Recognition of a cost is deferred because as n item it has not yet been consumed or spread (by means of amortization) over the relevant periods for which it corresponds.

It is also known alternatively as a deferred charge or a deferred expense.