What expense category are pension benefits?
Audrey Carroll, Senior Manager, Accounting, RampSee how Ramp automates accounting for 30,000+ businesses
Pension benefits can be classified as an operating expense or a non-operating expense. The main difference between the two is that operating expenses are incurred in order to generate revenue, while non-operating expenses are not. Pension benefits are a long-term liability of the company, and as such, are not directly related to generating revenue. For this reason, pension benefits are typically classified as a non-operating expense.
Operating Expenses
Operating expenses are those that are incurred in order to generate revenue. This includes things like the cost of goods sold, selling, general and administrative expenses, and research and development expenses. Pension benefits are not directly related to generating revenue, and as such, are not classified as an operating expense.
Non-Operating Expenses
Non-operating expenses are those that are not directly related to generating revenue. This includes things like interest expense, depreciation and amortization, and pension benefits. Pension benefits are a long-term liability of the company, and as such, are typically classified as a non-operating expense.
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The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.
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