Discretionary expenses are those charges which could be avoided by the business entity for the survival of the business. They are the expenses incurred only on the decision of management officials, else avoided.
What are expenses?
Expenses are the amounts that is being incurred by any entity whether an individual, firm or a government throughout a year. They are determined to know what amount of profit margin is being earned. The profit arises when expenses are lesser and revenues are more.
The expenses which are not needed to be incurred either by an individual or a firm are referred to as discretionary expenses. They are also known as non-essential expenditure.
It is a charge without which an individual or a business entity can easily survive in the competitive world. These expenses can be ignored or postponed by the business due to its no requirement in the current scenario.
Therefore, the discretionary expenses are explained as above.
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