A cost / expenditure that has been incurred, while an entity still expects further benefits (in future periods), and hence it is said to be “unexpired”. Unexpired cost does not form part of production costs or operational cost for the period during which it is reported, as an asset, on an entity’s balance sheet. The benefits corresponding to unexpired cost are not consumed or used up yet. Examples of unexpired costs include prepaid rent, prepaid insurance, etc.

This type of cost is also known as a deferred cost.