Indirect Expense
/ɪnˈdɪrɛkt ɪkˈspɛns/
Definitions
- (n.) A cost not directly accountable to a specific project or activity but necessary for general business operations.
Rent and utilities are examples of indirect expenses in a company's accounting.
- (n.) Expenses allocated across multiple cost centers or projects, often contrasted with direct expenses in legal cost and financial reporting contexts.
Indirect expenses are carefully distinguished from direct expenses when calculating damages in litigation.
Forms
- indirect expense
- indirect expenses
Related terms
See also
Commentary
Indirect expenses must be clearly distinguished from direct expenses in contracts and cost reporting to avoid ambiguity in financial and legal analyses.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.