For example, if you need a cell phone, you can take the one that comes free with your service plan instead of buying the one that has Internet, instant messaging and a camera. Discretionary accrued expenses are expenses that the business is not obligated to pay but considers to have been incurred and not yet paid. 'Discretionary Expenses' is explained in detail and with examples in the Economics edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition. Usually discretionary costs represent funding for a specific activity (or project) for a specified period of time. A discretionary expense refers to those business or home costs that are not considered to be critical for the entity to function or operate effectively. These can be budgeted for with categories such as contingency and discretionary. They're purchases that are important to leading a satisfactory life, but that you could go without if push came to shove. Discretionary costs (avoidable costs) are costs or capital expenditures that can be curtailed or even eliminated in the short term without having an immediate impact on the short-term profitability of a business. Discretionary and non-discretionary spending are terms used to describe the categories of expenses you use daily in life. Discretionary Fixed Cost Example Since discretionary fixed costs are defined as those that ebb and flow over long periods of time, they can vary widely based on the type of business you operate. Examples of discretionary costs include advertising, maintenance, training, R&D, etc. The approver of discretionary expenditures is expected to be prudent and exercise sound judgment. https://www.thebalance.com/budget-worksheet-discretionary-spending-453594 ‍ Discretionary costs examples. While some discretionary expenses may be needs (such as clothing, unless your workplace is remarkably open-minded), how much you spend on these items is up to you. He/she must be satisfied that the expense is reasonable, allowable, and conforms to the policies contained in this document. Marketing You can think of discretionary expenses as quality-of-life purchases. Personal variable expenses includes costs that are discretionary, unpredictable, one-time, unusual or that go up and down according to usage. Allowability of Selected Discretionary Expenditures A. Alcoholic Beverages Discretionary costs are opposite to committed costs – i.e., expenses that an entity must incur to operate. Examples of discretionary costs are listed below (non-exhaustive list): Advertising ; Employee training and development Examples of discretionary accrued expenses are rare, but bonuses to be paid to management are an excellent example. 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