According to the Basel III Standardized Approach for operational risk, the items required to be excluded from the gross loss amount include internal or external expenditures aimed at enhancing or upgrading the business and systems after an operational risk event. Therefore, upgrade costs are not considered part of the operational loss itself and are excluded from regulatory capital computations.

A is incorrect because an increase in the internal loss reporting threshold would result in fewer losses being recorded, which would decrease (not increase) the operational risk capital calculated. B is incorrect because it is practically impossible to accurately quantify the total financial impact of an operational risk event immediately upon discovery; impacts usually evolve and are estimated over time. C is incorrect because indirect consequences, though generally excluded from standard direct operational loss calculations, can sometimes have identifiable monetary consequences (e.g. lost revenue).