Accounting · Odoo glossary
Sunk Cost
An incurred cost that cannot be recovered, regardless of the next business decision.
Definition
In general ERP practice
A sunk cost is a cost already incurred that cannot be recovered and does not change whichever alternative is chosen next. It remains part of the accounting history but is not relevant when comparing future actions.
In Odoo
Odoo does not have a dedicated standard accounting category called Sunk Cost. You can identify these costs through a separate analytic account or, where appropriate under your chart of accounts and accounting policy, a separate expense account. This classification does not require recognizing the same expense twice.
Project budgeting note
In project management, we can configure a cost budget and a separate category for expenditure expected to become unrecoverable if the project stops early. Planned expenditure is not yet a sunk cost; equipment resale and inventory clearance may recover part of an investment.
Official Odoo documentation
The Odoo-specific explanation above is based on the documentation for Odoo 19. Features and workflows can differ in other versions.
Related glossary terms
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