Question

What is difference between finance expense and finance cost ??

Answer 1

Finance expense reduces money and finance cost tell its cost .....

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Answer 2

Finance Cost:The payments done by a firm or company on short term and long term borrowings.

Finance Expense:Expenses incurred by a firm or company from owning from purchasing or renting any physical asset or property.

Explanation:

In business,finance cost basically implies the costs of the firm or a company in terms of the interest payments on short term borrowings such as bank overdraft or accounts payable and long term borrowings which include long term loans and mortgage payments.The firm or company has to pay a recurring or periodical interest payments on these borrowings or loans which are added to the finance cost.

Finance expenses implies the firm or company expenditure on the purchase or renting of any physical asset by the firm such as machinery and equipment and any other expenses such as income tax or the maintenance expenditure of these assets and properties. Hence,finance expenses are exclusively related to the ownership or renting of any physical asset or property in business.