Storage costs

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Lasa1
Posts: 31
Joined: 07 Oct 2020, 11:29

Storage costs

Post by Lasa1 »

Hi,

Is there any guidance on where to report storage costs in the P&L Statement based on the function method (see below)? I would say that those costs are reported under Cost of Sales but it makes me doubt the fact that they are not included in inventory cost.

Question relates to the storage costs that are not necessary in the production process before a further production stage.

Thanks
Regards

PROFIT AND LOSS STATEMENT
Net sales
Cost of sales
Research and development expenses
Selling, general and administrative expenses
Interest expense
Provision for income taxes
JRSB
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Joined: 01 Mar 2020, 01:10
Location: UK

Re: Storage costs

Post by JRSB »

Almost certainly not.

Even where a specific type of cost is mentioned the standards refer to 'in profit or loss'. so just have a consistent accounting policy.
Student of IFRS.
Lasa1
Posts: 31
Joined: 07 Oct 2020, 11:29

Re: Storage costs

Post by Lasa1 »

ok, so storage cost could be reported under Cost of Sales if this is the Accounting Policy or somewhere else as long as it is consistent with the Accounting Policy, right?
Thanks!
pub_acco
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Joined: 19 Mar 2020, 16:40

Re: Storage costs

Post by pub_acco »

IAS 2.38 implies that cost of sales usually means the amount expensed this year that was previously recognized as part of inventories. So, although IFRS doesn't preclude to include the storage costs in cost of sales, if you elect to do so, you will need to disclose separately the amount of inventories expensed in accordance with IAS 2.36(d).
Lasa1
Posts: 31
Joined: 07 Oct 2020, 11:29

Re: Storage costs

Post by Lasa1 »

Thanks pub_acco.
Sorry, not clear to me …
Can I ask you where you would report storage costs in an income statement as shown above?
Thanks
pub_acco
Trusted Expert
Posts: 275
Joined: 19 Mar 2020, 16:40

Re: Storage costs

Post by pub_acco »

I'd be likely to choose Selling expenses if the storage cost relates to finished products waiting for sale.
Lasa1
Posts: 31
Joined: 07 Oct 2020, 11:29

Re: Storage costs

Post by Lasa1 »

Thanks!
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