Deferred Acquisition Costs - DAC

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DEFINITION of 'Deferred Acquisition Costs - DAC'

Typically used in the insurance industry, this is when a company defers the sales costs that are associated with acquiring a new customer over the term of the insurance contract.

INVESTOPEDIA EXPLAINS 'Deferred Acquisition Costs - DAC'

Most of the sales costs arise from referral commissions to external distributors and brokers.

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