Operating Expense

A day-to-day running cost, charged against profit in the period it occurs.

Operating expenses cover rent, salaries, utilities, marketing and similar recurring costs of keeping a business running. They are expensed immediately, unlike capital spending, which is capitalised and written down over years. That distinction is a common place for aggressive accounting, since shifting a cost from one bucket to the other flatters current profit.

Moving a cost from operating expense to capital spending flattered this year's profit and nobody else's.