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 are any type of expense that is not considered to be essential to the operation of the home or business. 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. The approver of discretionary expenditures is expected to be prudent and exercise sound judgment. You can think of discretionary expenses as quality-of-life purchases. These can be budgeted for with categories such as contingency and discretionary. Usually discretionary costs represent funding for a specific activity (or project) for a specified period of time. Examples of discretionary accrued expenses are rare, but bonuses to be paid to management are an excellent example. Personal variable expenses includes costs that are discretionary, unpredictable, one-time, unusual or that go up and down according to usage. https://www.thebalance.com/budget-worksheet-discretionary-spending-453594 Examples of discretionary costs include advertising, maintenance, training, R&D, etc. Discretionary costs are opposite to committed costs – i.e., expenses that an entity must incur to operate. 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. Examples of discretionary costs are listed below (non-exhaustive list): Advertising ; Employee training and development Marketing They're purchases that are important to leading a satisfactory life, but that you could go without if push came to shove. '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. Likewise, if you need the item, but the one you want has far more features than you'll ever use, it’s a discretionary expense. Allowability of Selected Discretionary Expenditures A. Alcoholic Beverages 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 costs examples. 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. Discretionary and non-discretionary spending are terms used to describe the categories of expenses you use daily in life. He/she must be satisfied that the expense is reasonable, allowable, and conforms to the policies contained in this document. 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