Kulud

Kulud is Estonian for costs or expenses. In accounting and business language, kulud describe outflows of resources that arise from the ordinary operations of an entity and that reduce equity, other than distributions to owners. In accrual accounting, kulud are recognized when the related economic benefits are consumed or when services or goods are used, and they are typically recorded in the income statement.

Kulud are usually classified into several categories to support financial analysis and budgeting. Common distinctions include fixed versus variable kulud, direct versus indirect kulud, and operating versus non-operating kulud. Within product costing, kulud may be divided into cost of goods sold and other period costs. Non-cash expenses such as depreciation and amortization are also included among kulud, reflecting the allocation of long-term assets’ costs over their useful lives.

Accounting treatment follows the principle of matching revenue with the expenses that generate it. Managers use cost classifications to assign kulud to specific responsibility centers or cost objects and to determine profitability. Budgets and cost-control practices, such as variance analysis, zero-based budgeting or activity-based costing, are often employed to manage kulud and improve efficiency.

Typical examples of kulud include rent, salaries and wages, utilities, office supplies, materials used in production, depreciation, maintenance, insurance, travel, and advertising. Tax treatment and deductibility of kulud vary by jurisdiction, but in general kulud are a key element in measuring financial performance, determining pricing, and guiding strategic decision-making.