A cost item/ expenditure from which an entity expects no further benefits, and hence it is said to be “expired”. Expired cost may be either an expense or loss. Expired cost turns into an expense when an asset or service is used up (consumed). More specifically, an expense comes up if expired cost results in a matching economic benefit (in which case, it is known as a utilized expired cost). In this specific sense, an expense forms that part of expired cost whose corresponding benefit/ utility is used in an entity’s operations (productive activities, etc.)

If no matching economic benefit corresponds to (results from) expired cost, then a loss occurs (in which case, that part is dubbed “unutilized expired cost“).