Fixed costs that have been committed: These are long-term organizational investments that are difficult to modify. Investments in assets like as buildings and equipment, real estate taxes, insurance fees, and some top-level management salaries are examples of committed fixed costs. They cannot be eliminated from the business model entirely, because some level of investment will be necessary to maintain existing services and facilities. Committed fixed costs must be included in the calculation of net profit or loss. They cannot be deducted immediately after they have been incurred. Instead, they should be reflected in the annual budget for the following year. For example, if a company invests $10,000 in leased office space that will expire at the end of the year, there is no way to deduct this expense until the lease has been paid off through monthly rent payments. At that point, you could claim a rental deduction of $10,000 for the year. However, since the company failed to set aside any funds for this purpose, it would not have enough money left over at the end of the year to cover its expenses. The company would need to come up with another way to pay for these expenses, like by raising its prices or cutting back on services. Either method would cause revenue to decrease, which would lead to lower profits.