Operating Expenses

Amounts paid to maintain property, such as Property Taxes, Utilities, Hazard Insurance. Excludes Financing expenses and Depreciation.
Example: The following operating expenses are incurred:

• maintenance

• management

• real estate taxes

• hazard and liability insurance

• utilities

• supplies

The following are not categorized as operating expenses:

• debt service

† principal payments

† interest

† loan fees

† participation payments

• depreciation

• income taxes

Costs associated with the selling and administrative activities of the company; also called nonmanufacturing expenses. They represent a Period Cost related to time rather than to the product. They are subdivided into Selling Expenses and General and Administrative Expenses.