Items: - items that generally must be paid for at the time of closing and are generally recurring charges. Prepaid items may include the following: First year premiums for hazard, flood and mortgage insurance. Prorated interest. Any special assessments which must be prepaid (i.e.; water/sewer connection, etc.). Escrow account for any of the above.
Asset created by payment for economic benefits that do not expire until a later time; as the benefit expires the asset becomes an expense (for example, prepaid rent, prepaid insurance).
Expenses necessary to create an escrow account or to adjust the seller's existing escrow account. Can include taxes, hazard insurance, private mortgage insurance, and special assessments.