Insurance Premiums: Some insurance premiums, like car or life insurance, may be paid semi-annually or annually. Car Registration and Maintenance: These costs occur annually or biennially and can sometimes catch you off-guard if not budgeted for. As such, discretionary expenses rarely have anything to do with a business or household's day-to-day operations and, instead, have to do with lifestyle and choice. List of Common Flexible and Periodic Expenses. These are generally considered wants, while non-discretionary expenses are usually referred to as needs. While non-discretionary expenses are considered mandatory-housing, taxes, debt, and groceries-discretionary expenses are any costs incurred above and beyond what is deemed necessary. Discretionary expenses vary depending on the business or person.Įxpenses are divided into several categories, namely non-discretionary and discretionary.Tracking discretionary expenses enables businesses and households to identify where they can save money in times of financial difficulties.Depreciation is recorded at a rate of 0.30 per mile. In this illustration, the limousine’s depreciation can be computed using the number of miles driven in a year, an easy figure to determine. Learn how to plan for them with a step-by-step guide, examples of common periodic expenses, and tips on how to save money and track your spending. periodic report for each reporting period that such person earns or incurs. Periodic expenses are any expenses that come up occasionally, and often vary in cost. ![]() Following is the profit and loss statement of ABC Ltd, you are required to compute period expenses. UOP is justified because the periodic expense is matched with the work actually performed. expenses in an amount in excess of five thousand dollars or, if the lobbyist. However, if you use software that doesnt include flexible budget category amounts, you can budget for the average: Find the cost for the year and divide by 12 for your monthly amount. Still, the travel and entertainment are not directly related to the product cost, and since they are incurred periodically, they must be assigned as a periodic expense. In a corporate environment, discretionary expenses are usually costs linked with improving a company’s reputation among its customers and employees. Some personal finance software lets you set a different amount from month to month for expenses that vary.A discretionary expense is a cost that is not essential for the operation of a home or a business.
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