Currently I have just finished my lesson on Selling, General & administrative Expenses under the Financial Quadrant section.
So I am a bit confuse by the worker/director salary cost, which category of the income statement should this cost fall under to COGS or SGA?
If different company chooses a different category salary cost, as an investor how do we know which category has the company choose?
Is there any accounting standard we should know or watch out for before we start reading the numbers from the annual report??
Thanks guys for taking time to read this and hope to hear from you guys soon
It depend on the type of business to classify worker salary. For instance, if the company is a service based business such as Vicom, their COGS should be their worker salary but if the company is a product based business than the salary should be under the SGA. I hope i clarified your doubts. Feel free to ask more questions if you are still unclear.
Sorry to jump in here.. I had the same struggle when trying to classify what is COGS/SGA.
I have included the Income Statement for Comfort Delgro, and indicated three items as SGA, while the rest will be COGS.
Would you have done the same? Your thoughts please.
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