Dictionary of Accounting Terms: functional reporting of expenses
functional reporting of expenses
presenting expenses by major activity. Functional reporting is used by not-for-profit entities other than governmental units and hospitals. Under functional reporting, expenses are accumulated according to program purpose (e.g., research) rather than by object of expenditure. By contrast, under object reporting, items are accounted for according to their natural classification (e.g., salaries expense). Functional classification is also used for profit operations: manufacturing, selling, and administrative.
