Importance Expenses and costs are not mutually exclusive concepts. They are often used as synonyms. However, if it is conditionally acceptable in the professional environment and special literature, in regulations, where terminology should be maximally precise, it is inadmissible, though it is not observed in all cases. Currently, in accounting, there is no legislative consolidation of the term costs unlike with the term expenses. This results in ambiguous understanding of the cost concept. Objectives The aim is to reveal the most precise semantic content of the terms expenses and costs, through analyzing their use in various conceptual spaces. Methods The study rests on heuristic, empirical, and sociological methods. Results We offer a unique definition of costs, the algorithm of transformation of costs into expenses, identify certain instances where these two terms are used in the Russian Accounting Standards and their meaning runs counter to their economic substance. The findings may be useful for developing accounting regulations at all levels, conducting further research on financial and management accounting, and in teaching practice. Conclusions The content analysis shows that the term costs is actually applied in Russian Accounting Standards, however, the lack of its official definition generates unreasonable interchangeability of the terms costs and expenses and leads to their distorted economic substance. It is crucial to formalize the term costs in Russian Accounting Standards.
Keywords: expenses, charges, costs, accounting
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