Operating or Non operating expense

This query is : Resolved

Neev Garg (Querist)
Follow

09 July 2022 Sir I want to know why interest on borrowings is classified as non operating expense as, rent on office or factory is classified as operating expense interest payment is also incurred to finance operating costs like rent etc

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

10 July 2022 Operating expenses are those directly associated with running the business.
Examples include:
Staff salaries
Office supplies
Sales-related costs such as commissions, marketing and advertising
Research and development costs
Rent, utilities and insurance premiums
Everyday repairs to equipment
Travel expenses related to normal business activities etc.

While a non-operating expense is a cost that isn’t directly related to core business operations
Examples of non-operating expenses are interest payments on debt, restructuring costs, inventory write-offs and payments to settle lawsuits.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now