Accounting treatment of prepaid court costs

The accounting will depend on the reason for the court costs. If your company is a defendant in a civil action, then you would be assessing whether a loss is probable and estimable, and accruing for the best estimate of the loss - the fees would be part of that estimated loss and so would be expensed (or charged against the accrual if you had previously accrued for the estimated loss). On the other hand, if the company is a plaintiff then it might be appropriate to defer the fees and offset them against any ultimate recovery, but you would have to be able to demonstrate that it is likely that the company would prevail and recover something in excess of the fees. If the fees are for something else, then follow the relevant accounting (e.g., if for an M&A transaction, expense; if part of the process of applying for a patent, potentially capitalizable; etc.)