Prepaid expenses typically include where the government has paid out in advance for goods and services yet to be received. The other element is for contributions. So where the government makes a transfer payment to a not-for-profit recipient and it's a contribution arrangement as opposed to a grant, we treat that contribution as a prepaid expense until such time as the recipient actually uses the money. So you might have some of that money left outstanding at year-end, and that's considered a prepaid expense.
On November 20th, 2007. See this statement in context.