4.5.1.5 Operating Expenses

Operational expenses are expenses such as salaries, rents and so on incurred at frequent intervals for the purpose of the day-to-day running of the business. These are essentially income statement line items and the forecasted values of such expenses are reported as part of FR 2052b template. Download for these items is across multiple tenors specified as days, each of which is bucketed appropriately based on a 30/360 convention.

The items in FR 2052b that are treated in a manner similar to operational expenses include:

1. 14.3 Operating Cash Inflows
2. 16.1 Common Dividends
3. 16.2 Operating Expenses

For instance, operating expenses are provided 100 in 1 day, 200 in 5 days, 300 in 10 days and 400 in 60 days. They are bucketed in FR 2052b as follows:

Table 3-11 Operating expenses

Time Bucket	Time Bucket Size (in Days)	Time Bucket Start Day	Time Bucket End Day	Operating Expenses
Day 1	1	1	1	100
> 1 Day <= 1 month	29 [=(30*1) – 1]	2	30 [=30*1]	500 [=200+300]
> 1 month <= 3 months	60 [=(30*3) – 30]	31	90 [=30*3]	400

Note:

Day count convention of 30/360 is used where 1 Month = 30 days and 1 Year = 360 Days.