Operating Expense
/ˈɒpəreɪtɪŋ ɪkˈspɛns/
Definitions
- (n.) Costs incurred in the normal course of running a business, excluding capital expenditures.
The company's operating expenses increased due to higher wages and utilities.
- (n.) Expenses deducted in determining taxable income for a business under tax law.
Operating expenses are subtracted from gross income to calculate taxable profit.
Forms
- operating expense
- operating expenses
Related terms
See also
Commentary
Operating expenses are distinguished from capital expenditures; precise classification affects accounting and tax treatment.
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.