Outlay Cost

DEFINITION of 'Outlay Cost'

Any concrete business expenses that can be identified in the past, present or future. Outlay costs are easy to recognize and measure because they have actually been incurred. For corporations, outlay costs for new projects include start-up, production and hiring costs. Outlay costs for ongoing projects include rent, salaries and equipment maintenance.


Also referred to as "explicit costs."

BREAKING DOWN 'Outlay Cost'

In cash accounting, outlay costs immediately reduce earnings. In accrual accounting, outlay costs are split across all the periods that the expense applies to and matched to related revenues. Outlay costs do not include forgone profits or benefits; such costs are known as "opportunity costs" and are a hidden, but important, component of a business's profitability.

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