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Implicit cost, also known as, implied cost is the cost a firm must pay to use a factor they already own. The cost does not initially show up. But is paid later on. For example if a company purchases a machinery instead of renting it, implicit cost is the cost of depreciation. On the other hand explicit cost is the direct cost of something. For example the cost of renting a machinery.
Rent, salary and other operating expenses are considered explicit costs and are recorded within a company's financial statements. The main difference between the two types of costs is that implicit costs are opportunity costs, while explicit costs are expenses paid with a company's own tangible assets.
implicit cost is cost that has already occurred but is not necessarily shown or reported as a separate expense
explicit cost cash outflows from a business that reduce its bottom-line profitability.
