A more thorough explanation:

A deferred charge is an expense that is not recognized on an income statement but is carried forward on the balance sheet as an asset to be written off in the future. This means that the cost of the expense is spread out over time instead of being recognized all at once.

One example of a deferred charge is insurance premiums. When a company pays for insurance coverage, the cost of the premiums is not recognized as an expense on the income statement right away. Instead, it is recorded as an asset on the balance sheet and is gradually written off over the course of the insurance coverage period.

Another example of a deferred charge could be the cost of a long-term contract. If a company signs a contract to provide services over a period of several years, the cost of fulfilling that contract may be deferred and recognized as an expense over the course of the contract.

These examples illustrate how a deferred charge allows a company to spread out the cost of an expense over time, rather than recognizing it all at once. This can help to smooth out fluctuations in expenses and provide a more accurate picture of a company's financial performance over time.