costs versus expenses

English translation: Cost

13:11 Apr 11, 2010
English language (monolingual) [PRO]
Bus/Financial - Law: Contract(s) / sums payable for electricity, water, utilities
English term or phrase: costs versus expenses
In addition to the rent, the Lessee shall pay all **expenses(costs?)** for the leased area and its share of the common areas relating to the supply of electricity, gas, ... and water.
...
The **expenses (costs?)** of the supply and consumption of gas, hot water, electricity and water shall be calculated on the basis of the metered consumption in the leased premises.

I am working on a contract for the lease of business premises in a large property with several units. The terms include the usual payments due for electricity, water, gas, refuse collection and so on.

I have been provided with a TM by the client, and the amounts payable are consistently referred to as expenses.
This sounds wrong to me - I would call them costs.

Most of my dictionaries seem to give these two as complete synonyms, but my monolingual Business Dictionary does indicate there is a diference.
Cost is the actual sum of money paid, while expense is more the principle of the thing.

If you save on expenses like electricity, the cost will be lower.

One Danish-English business dictionary gives examples of usage that partly support my preference for cost(s), but the Danish word, udgift can be translated either way.

Is this simply a personal preference, or is it a standard collocation?

I have been asked to make corrections where necessary, but only where necessary, where the TM gives 100% matches. On the whole they are quite helpful, but in one or two places they have obviously fitted in a different context, but not mine.

Here I am in doubt. Should I conform and write ´expense(s)´ where there are no matches, or should I change the TM and write ´costs´ consistently?
Christine Andersen
Denmark
Local time: 06:06
Selected answer:Cost
Explanation:
Here it is the cost of electricity, Gas and water that needs to be paid.

We have a horrific position now where costs are "expensed" in accounting terms, but this is no reason for losing a sense of good english.
Selected response from:

Jack Dunwell
France
Local time: 06:06
Grading comment
Thanks!
This was the one that tipped the balance!
3 KudoZ points were awarded for this answer



SUMMARY OF ALL EXPLANATIONS PROVIDED
3 +2[see below]
Taña Dalglish
4expense
John Detre
4Cost
Jack Dunwell
3(see below)
Robert Forstag
3costs
Tom Fennell


Discussion entries: 1





  

Answers


41 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
(see below)


Explanation:
To me, the difference is one of perspective. An amount to be paid is seen as a "cost" in an objective sense ("the cost of gas´ or "the cost of bread") while that same amount is seen as an "expense" from the point of view of the business or private party in question that is responsible for paying said amount.

I would thus see "expense(s)" as correct in the context of the extract you have posted.

Robert Forstag
United States
Local time: 01:06
Meets criteria
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Native speaker of: English
PRO pts in category: 8
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53 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5 peer agreement (net): +2
[see below]


Explanation:
The two examples you have provided, I tend to agree with you that "costs" sounds better. However, here are two articles that may help you.

In addition to the rent, the Lessee shall pay all **costs** for the leased area and its share of the common areas relating to the supply of electricity, gas, ... and water.
...

The **costs** of the supply and consumption of gas, hot water, electricity and water shall be calculated on the basis of the metered consumption in the leased premises.

http://biztaxlaw.about.com/b/2009/06/27/cost-vs-expense-what...

Cost vs. Expense - What is the Difference?
Saturday June 27, 2009
A quick question for the weekend: What is the difference between cost and expense?
This difference is a little tricky to figure out, because we often use the terms interchangeably. We say, "What does this cost?" "What is the cost of that phone?" "How much does your rent cost?" But the use of the word "cost" is deceiving. Accounting types reserve the use of the word "cost" for one special use:

Cost is the price of an asset. Sometimes it is called "cost basis." The cost basis of an asset includes every cost to purchase, acquire, and set up the asset, and to train employees in its use. For example, if a manufacturing business buys a machine, the cost includes shipping, set-up, and training. Cost basis is used to establish the basis for depreciation and other tax factors.
An expense, on the other hand, doesn't usually have an asset attached to it. An expense is an ongoing payment, like utilities, rent, payroll, and marketing. You could say that an expense is a cost of doing business, but I am going to avoid that word. Expenses are used to produce revenue and they are deductible, reducing the business's income tax bill.

For example, the expense of rent is needed to have a location to sell from, to produce revenue. The cost of a business phone is required to take calls from customers who want to buy the business's products and services. There is usually no asset associated with an expense. Although we use the term "cost" with expenses, they are really just payments.

Still confused? Just think of "cost" with assets and "expenses" with payments. It's like "debits and credits," but I don't want to get into that on a hot summer weekend.


http://www.turtlesoft.com/Business-Software-Answers/Job-Cost...

HTH!

Taña Dalglish
Jamaica
Local time: 00:06
Meets criteria
Specializes in field
Native speaker of: English

Peer comments on this answer (and responses from the answerer)
agree  eski: Good explanation, Inspector! Besos, Taña: eski
1 hr
  -> Thanks, Dodger. Not my explanation (the author of the article), but appreciate the support. Besos!

agree  Ildiko Santana
4 hrs
  -> Thank you so much, ildiko.
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1 hr   confidence: Answerer confidence 4/5Answerer confidence 4/5
expense


Explanation:
Costs is a broader term than expenses. It includes expenses but also capital costs (i.e. the cost of purchasing the asset). Expense is the correct term in your context because the tenant will not be paying capital costs for the leased area (i.e. the mortgage) but only the expenses.

John Detre
Canada
Does not meet criteria
Native speaker of: English
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1 day 4 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
Cost


Explanation:
Here it is the cost of electricity, Gas and water that needs to be paid.

We have a horrific position now where costs are "expensed" in accounting terms, but this is no reason for losing a sense of good english.

Jack Dunwell
France
Local time: 06:06
Meets criteria
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 3
Grading comment
Thanks!
This was the one that tipped the balance!
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374 days   confidence: Answerer confidence 3/5Answerer confidence 3/5
costs


Explanation:
One must be very careful with this ordinary term - it is a precise legal and accounting term, but the definitions differ in different languages (jurisdictions), so translation into another language (jurisdiction) can be very problematic.

Here the Danish, not just the English is determinative.

In Russian statutory accounting "expenses" are strictly for overhead expenditures, while "costs" are for production expenditures.

Since Russian accounting is based on Central European accounting, I suspect Danish accounting classification may be closer to Russian usage than to English.

Since this is a legal, rather than an accounting document, it probably is not a critical difference, but in an accounting document "costs" might be an error for such overhead "expenses."

The International Accounting Standards Board defines expenses as
...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.
- IFRS Framework, F.70

In accounting, costs are the monetary value of expenditures for supplies, services, labour, products, equipment and other items purchased for use by a business or other accounting entity.
- http://en.wikipedia.org/wiki/Cost

Tom Fennell
United States
Local time: 00:06
Meets criteria
Specializes in field
Native speaker of: Native in EnglishEnglish
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