Cost Types

Cost Types let you view the same cloud spend in different ways. Each Cost Type applies a different set of calculations to your billing data, so you can choose the one that fits what you are analyzing. For example, you can see what you were invoiced, what your team actually consumed, or what you would have paid at on-demand rates.

You can select a Cost Type in Explorer and throughout the CloudZero platform.

Which Cost Type should I use?

Cost Type definitions

Amortized Cost

Amortized Cost starts with Billed Cost (before discounts) and spreads upfront and recurring Reserved Instance (RI) and Savings Plan (SP) charges across the resources they apply to, based on usage. Negotiated discounts (such as EDP or private rate discounts) are not applied.

When to use: You want to normalize commitment charges across resources without mixing in negotiated discount programs. For example, when building chargeback models where you want to allocate commitment value to teams before layering in other discounts.

Billed Cost

Billed Cost reflects the exact prices you will be invoiced for. It is the simplest Cost Type: discounts, RI charges, and SP charges appear as distinct line items rather than being applied to individual resources.

When to use: You are reconciling against your actual invoice or you need to understand the real cash flow timing of your cloud spend.

Discounted Cost

Discounted Cost assigns discounts to the applicable resource and usage charges instead of showing them as separate line items. This includes EDP Discounts, Private Rate Discounts, RI Volume Discounts, and others. RI and SP commitment charges are not amortized.

When to use: You want to see the net price per resource after discounts but need to preserve the real timing of commitment payments. For example, when analyzing the cash flow impact of an upfront RI purchase or evaluating whether to buy a new commitment.

Discounted Amortized Cost

Discounted Amortized Cost starts with Discounted Cost (discounts applied to resources) and also amortizes upfront and recurring RI and SP charges across the resources they apply to. This reflects the effective cost of each resource, taking into account both discounts and commitment-based pricing.

When to use: You want the most complete view of what each resource actually costs your organization. Commonly used for chargeback, showback, and detailed cost allocation.

Invoiced Amortized Cost

Invoiced Amortized Cost is similar to Discounted Amortized Cost, but only the recurring portion of RI and SP charges are amortized. Upfront charges (All Upfront or the upfront portion of Partial Upfront) remain as separate line items. This ensures that the total cost for a billing period reflects only charges incurred in that period.

When to use: You need financial reporting where costs align to the billing period in which they were incurred.

On-Demand Cost

On-Demand Cost shows what you would pay for equivalent usage at on-demand rates, without any discounts, RIs, or SPs applied. For line items without an on-demand rate, Billed Cost is used as a fallback.

When to use: You want to calculate your effective savings rate (the difference between what you pay and what you would pay without commitments or discounts).

Real Cost

Real Cost is the default Cost Type in Explorer. It starts with Discounted Amortized Cost and filters to consumption-related charges only, removing taxes, support fees, and similar non-usage charges. Unused portions of RIs and SPs are also excluded.

When to use: You want to monitor and investigate costs day to day. Real Cost is designed around the principle that every engineering decision is a buying decision. By removing taxes, support fees, and other overhead that engineers have no influence over, Real Cost shows only the spend that is driven by engineering choices.

Cloud provider details

Each cloud provider handles billing differently, which affects how some Cost Types behave. The following sections cover provider-specific availability, limitations, and nuances.

AWS

Invoiced Amortized Cost is supported only for AWS.

Cost and Usage Report mapping

The following maps each Cost Type to the corresponding columns in the AWS Cost and Usage Report.

Azure

On-Demand Cost is not supported for Azure. Azure does not provide on-demand pricing for all billing line items.

Discounted Cost vs Discounted Amortized Cost: Total amounts for these two Cost Types will not match when viewing Azure data over a given time frame. This is due to two differences in how Azure reports RI and SP costs:

• Upfront purchases appear only in the purchase month. Azure provides information about upfront RI and SP purchases only in the month the purchase was made. In subsequent months, the only visible cost for an upfront RI or SP is the amortized usage. For example, if you fully pay upfront for a one-year RI in March, the full fee appears in Discounted Cost only when viewing March data. Discounted Amortized Cost spreads that fee across all 12 months.

• Monthly installments vs daily amortization. When an RI or SP is billed in monthly installments, the monthly fee is the full cost divided by the number of months. The daily amortized cost is the full cost divided by the number of days. This means the monthly fee for February and July is the same, but the daily amortized cost differs.

GCP

Real Cost for GCP includes committed use discount credits.