Expense (expense), is the total outflow of economic benefits incurred in the ordinary activities of the enterprise that will lead to a reduction in owners' equity, not related to the distribution of profits to owners.

Decrease in the economic interest of the accounting entity in a certain accounting period is one of the elements of the income statement. Expenses are incurred in the form of a decrease in owner's equity due to the outflow of assets from the enterprise, depletion of assets or increase in liabilities. But there are exceptions, such as the owners of the enterprise to withdraw their investment or the enterprise to the owners of the distribution of profits, although it will cause a decrease in assets or increase in liabilities, and make the owners of the decrease in equity, but does not belong to the enterprise to incur expenses of the economic business.

Expense, as an element of profit or loss, refers to operating expenses. The U.S. Financial Accounting Standards Board (FASB) has adopted this narrow concept of expense, treating loss as an income statement element parallel to expense. The International Accounting Standards Board (IASB) adopts the broader concept of expense described above. Accounting expenses include direct, indirect and period expenses. Period expenses, in turn, include selling, administrative and financial expenses.