Which accounting practice involves the separation of expenses for a clearer financial analysis?

Unbundling is the accounting practice that involves separating expenses into distinct categories or components for a more detailed and clearer financial analysis. This practice allows organizations to understand and manage various costs more effectively, enabling better financial decision-making and transparency. By breaking down expenses, it becomes easier to analyze the individual components contributing to overall costs, assess performance, and determine areas where efficiencies can be gained.

In contrast, capitalization refers to treating certain expenses as long-term investments rather than immediate costs, which can obscure the actual short-term financial picture. Accrual accounting focuses on recognizing revenue and expenses when they are incurred, regardless of when the cash is actually exchanged, which does not inherently involve the separation of expenses. Consolidation involves combining the financial statements of multiple entities into a single financial statement, which can mask the individual performance of those entities rather than clarifying expense categorization.