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In [[accounting]], '''expense''' has a very specific meaning. It is an outflow of cash or other valuable assets from a person or company to another person or company. This outflow of cash is generally one side of a trade for products or services that have equal or better current or future value to the buyer than to the seller. Technically, an expense is an event in which an [[asset]] is used up or a [[liability (accounting)|liability]] is incurred. In terms of the [[accounting equation]], expenses reduce owners' [[equity (finance)|equity]]. The [[International Accounting Standards Board]] defines expenses as:{{quote|...decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.<ref>IFRS Framework, F.70</ref>}}
Expense is a term also used in [[sociology]], in which a particular fortune or price is sacrificed voluntarily or involuntarily by something or someone to something or somebody else, often in the context that the ladder is taking [[advantage]] of the former.
==Bookkeeping for expenses==
In [[double-entry bookkeeping]], expenses are recorded as a [[debit]] to an expense account (an [[income statement]] account) and a [[credit (finance)|credit]] to either an asset account or a liability account, which are [[balance sheet]] accounts. An expense decreases assets or increases liabilities. Typical business expenses include salaries, utilities, depreciation of capital assets, and interest expense for loans. The purchase of a capital asset such as a building or equipment is not an expense.
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