Costs

Correspond to the assets or services used to produce other assets or services. It is the expense necessary to obtain assets or services.

Example: raw material, depreciation, wages, rent etc., consumed in the production of an asset, represent costs. In a narrow sense, the cost exists only during the process of producing the asset or service. Thus, when the product is in the manufacturing phase, the amounts added in its production are treated as costs. Once the product is finished, costs no longer exist and move on to have a good, which is the result of production as a new investment.

Acquisition of raw material is an investment. When used in the manufacturing of a product, raw material is considered as a production cost. The product obtained from the transformation of raw material is a new investment. During production, the raw material does not cease to be an asset. It is an investment in transformation. The acquisition of an industrial equipment represents an investment. In proportion to which the machine is used in production, it is proportionally converted into a cost, by depreciation. The product is a new investment which depends on depreciation in its production amount.