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Cost allocation

Posted: 25 Jun 2020, 02:26
by sinity
Hi everyone

If legal expenses are incurred as a result of a customer disputing an amount that they owe, and then the case is won, and the amount is paid by the customer, can those legal expenses be allocated to cos under IFRS, since they can be directly linked to an amount of revenue, or should they be allocated to g&a?

Re: Cost allocation

Posted: 25 Jun 2020, 08:15
by Marek Muc
This is purely a personal opinion, IFRS is silent on what goes to COS.

Re: Cost allocation

Posted: 25 Jun 2020, 10:40
by marea
Personally, I donĀ“t think that this should be part of COS since COS comprise costs that incurred to manufacture a product/create service that was sold.

Re: Cost allocation

Posted: 25 Jun 2020, 12:54
by JRSB
Would be a definite Admin item for me..!

Re: Cost allocation

Posted: 01 Jul 2020, 12:29
by Irfan Mustafa
See para 97 and 98 of IFRS 15. This cost is an admin item.

Re: Cost allocation

Posted: 01 Jul 2020, 12:48
by Marek Muc
but these paragraphs say nothing about classification in P/L...