ECONOMICS

Detailed explanation-1: -An expired cost is a cost that has been recognized as an expense. This happens when an entity fully consumes or receives benefit from a cost (sometimes resulting in the generation of revenue). An expired cost may also be construed as the total loss in value of an asset.

Detailed explanation-2: -The expense of depreciation is the best example of an expired cost. This expense is taken into use for a particular asset which has been used in the process of production and which expires after the sales of the goods.

Detailed explanation-3: -Costs that have been used up or consumed. Expired costs are reported as expenses. (Costs that have not yet expired are reported as assets.)

Detailed explanation-4: -But after spending time, its value will expire with depreciation. So, depreciation expense will be our expired cost. It may be 10% or 15% which will be based on the nature of fixed asset.

Detailed explanation-5: -Examples of unexpired costs are inventories, prepaid expenses, plant and equipment, and investments. Expired costs, which most costs become eventually, arethose that are not applicable to the production of future revenues and are deducted from currentrevenues or charged against retained earnings.