There is an important difference between Canceled cost and Cancellation fee.
The Cancellation fee is a sum of money that the client needs to pay if the reservation was canceled after the cancellation deadline, or if there was another reason for canceling.
Cancellation policies can be set up in the Rate groups of reservations and can be added to the reservation from the Status tab of the Reservation.
Canceled cost is the lost revenue from cancellations. It is not influenced by your cancellation policy, it simply shows the total potential revenue you could have generated without the cancellations.
This can be used to compare the created reservation's revenue and the canceled revenue to see if it is better to have people who are making reservations at the last minute or to have them book earlier. With that knowledge, the cancellation policies can be changed.
The Canceled cost can be found in the exported Reservation report.