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Andrew Tjhie asked 5 years ago

Hi Rusmin, Victor,
What is your take when considering COGS for telcos? I am looking at Singtel and it lumps everything as operating expenses. When digging further, within the operating expenses are:

  • selling and admin cost (not COGS?),
  • traffic expenses (is this COGS?),
  • staff costs (not COGS?),
  • cost of equipment sold (COGS?),
  • repair and maintenance (not COGS?),
  • other cost of sales – consists of auditor fee, impairment of trade receivable, allowance for inventory obsolescence, inventory written off, provisions for LD, operating lease payment of properties. (not COGS)

Is my classification correct? 
Those not falling under COGS, should I categorized them under SGA?

1 Answers
Victor Chng answered 5 years ago

Hi Andrew,
Some companies are hard to determine their COGS as they are service based business. If you still want to find their gross profit margin, I will usually use staff cost, traffic expenses, cost of equipment sold.