Features of operational activity expenses formation by elements
Authors: Ometsinska Iryna 
Published: January 2023

Introduction. Difficult enterprises’ operating conditions require strengthened expense control and an effective management system. Expenses accounting for different section groups creates an important information base for effective enterprise management. Thus, the division of expenses by elements involves the grouping of economically homogeneous expenses. This enables to form the information regarding material consumption, labor, and financial resources and to calculate the indicators that characterize the level of its efficiency at micro and macro levels. Though the list of expenses is established by regulatory documents, insufficient attention is paid to its content. There is not always an unequivocal position in the sectoral methodical recommendations on products’ cost formation (works, services) regarding the allocation of certain types of expenses to the corresponding element. This leads to information distortion about the elements’ size of operational expenses. Therefore, an important task today is to establish clear provisions regarding the content of expense elements, which will allow to provide a reasonable information about the usage of enterprise resources for management purposes.The purpose of the study is to scientifically substantiate the economic essence of the elements of expenses, to outline the content of each element of operating expenses according to the provisions of regulatory documents, and to establish the interrelationship between the component expenses of operational activity, divided according to classification features.Methods. In the process of research, the following methods were used: theoretical generalization, abstract-logical - to justify the economic content of expenses, divided by elements; comparison, grouping, analogies, analysis, and synthesis - to improve the content of expenditure elements; induction and deduction, modeling, structural and logical - to establish the interrelationship between different types of expenses of operational activity. The results. The expediency of dividing expenses by elements is substantiated and the relationship between elements of operating expenses and information about the usage of enterprise resources is presented. It is proposed to replace «material costs» with «material expenses», which will correspond to its content. Drawbacks in the presentation of expenses structure of operational activities by economic elements in accounting standards and sectoral methodical recommendations on products’ cost formation (works, services) are detected and the proposals for improving the content of the elements «material expenses», «labor expenses», «other operating expenses» were provided. The need to update and unify the expense structure by elements in various regulatory documents has been proven to reasonably form the third section of the Statement of Financial Results (statement of comprehensive income). The interrelationship between the component expenses of operational activities, divided according to various classification features is outlined.Perspectives. The further research perspectives are to determine the content of each element of operating expenses, based on the enterprise’s industry. This will contribute to the improvement of industry methodological recommendations on products’ cost formation (works, services).