Is prepaid rent an asset?

[Nalani]

My landlord made me pay six months upfront. Now I’m looking at my books and wondering—is prepaid rent an asset? Technically the money is gone, but I haven't "used" the space yet. Where does this live on a financial statement?

 

[Blaise]

Yes, prepaid rent is an asset. It’s recorded as a current asset on the balance sheet because it represents rent paid in advance for future use. As time passes and the rent period is used, it’s gradually expensed.

 

[dominic]

Yes, prepaid rent is considered an asset on a company's balance sheet. Specifically, it is a "current asset" because it represents a future economic benefit—the right to use a space that has already been paid for. Over time, as the rental period passes, the value of this asset is gradually moved from the balance sheet to the income statement as a rental expense.

 

[Aurora]

Yes, prepaid rent is an asset. It’s recorded as a current asset on the balance sheet because it represents rent you’ve paid in advance that hasn’t been used yet. As time passes and the rent period is used, it’s gradually recorded as an expense.

 

[Darcey]

Yes, prepaid rent is an asset. When a business pays rent in advance, it records the payment as a current asset on the balance sheet because it represents a future economic benefit. As time passes and the rent period is used, the amount is gradually expensed and reduced from the asset account.