Prepayments are invoices that the company has already paid but for services that have not yet been received.
It affects the cash flow but the recognition of the expense is performed at the end of each reporting period, to account for services received during the period, January in our case. The asset "prepayment" is recognised and expensed as an adjustment at the end of the reporting period to validate that the office has been used and the insurance coverage provided.
As recognition comes after payment is made, it is called a deferral.
As we have not as yet used the office for our business during F
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