Abstract:

Based on an assessment of the current cost classification regulations in international practice, including costs that can be incurred through profit, a classification approach has been proposed. The proposed classification can be a component of the development of the theory of preservation of purchasing power of investments and the concept of support of physical capital used in international financial reporting standards. We have concluded that profit is a marker of capital gains that can be reallocated. However, expenses at the expense of profit from which economic benefits are expected can be considered as economically justified investments. However, expenses that do not initially result in economic benefits, but are image-based, should be within the limits of adjusted profit, taking into account the capital maintenance provision.