The expenses in finance can be divided into: purchased materials; Fuel and power purchased; Wages and employee welfare expenses; Depreciation expense; Interest expense; Taxation; Other expenses.

Expenses are the total outflow of economic benefits that have nothing to do with the distribution of profits to owners in the daily activities of enterprises, which will lead to the reduction of owners' rights and interests. The form of expenses incurred by enterprises is the decrease of owners' equity due to the outflow of assets, loss of assets or increase of liabilities. However, there are exceptions, such as the enterprise owner withdrawing investment or the enterprise distributing profits to the owner. Although it will cause asset decrease or debt increase and owner's equity decrease, it does not belong to the economic business where the enterprise incurred expenses.

When confirming expenses, we should first divide the boundaries between production expenses and non-production expenses. Production expenses refer to raw material expenses, labor expenses and other expenses related to the daily production and business activities of enterprises for the production of products; Unproductive expenses refer to expenses that are not productive expenses, such as expenses incurred in purchasing and building fixed assets, which are not productive expenses.

Secondly, we should distinguish between production cost and product cost. The production cost is related to a certain period, but has nothing to do with the products produced; The product cost is related to a certain variety and quantity of products, no matter which period it occurs.

Finally, we should distinguish between production cost and period cost. Production expenses should be included in the product cost, while the period expenses should be directly included in the current profit and loss.

In addition to the definition, the recognition of expenses should also meet strict conditions, that is, expenses can only be recognized when the economic benefits are likely to flow out, resulting in the decrease of assets or the increase of liabilities of the enterprise, and the outflow of economic benefits can be reliably measured. Therefore, the confirmation of expenses should at least meet the following conditions:

First, the economic benefits related to expenses are likely to flow out of the enterprise; Second, the outflow of economic benefits from enterprises will lead to asset reduction or debt increase; Third, the outflow of economic benefits can be measured reliably.

Reference materials? Baidu encyclopedia? expense