Cost allocation

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sinity
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Joined: 25 Jun 2020, 02:04

Cost allocation

Post 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?
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Marek Muc
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Re: Cost allocation

Post by Marek Muc »

This is purely a personal opinion, IFRS is silent on what goes to COS.
marea
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Joined: 27 Feb 2020, 17:35

Re: Cost allocation

Post by marea »

Personally, I don´t think that this should be part of COS since COS comprise costs that incurred to manufacture a product/create service that was sold.
JRSB
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Re: Cost allocation

Post by JRSB »

Would be a definite Admin item for me..!
Irfan Mustafa
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Re: Cost allocation

Post by Irfan Mustafa »

See para 97 and 98 of IFRS 15. This cost is an admin item.
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Marek Muc
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Re: Cost allocation

Post by Marek Muc »

but these paragraphs say nothing about classification in P/L...
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