Classifying expenses by nature-income statement, Financial Accounting

Assignment Help:

Classifying expenses by nature

Under this format, expenses are not classified by their nature i.e. referred to specifically according to their type and the major categories of expenses are:-

  1. Changes in finished goods and work in progress
  2. Raw materials consumed
  3. Depreciation and amortization
  4. Employee benefits (staff costs)
  5. Other expenses
  6. Finance costs


NOTE: Classification of expenses by function is the most common format used and classification of expenses by nature is more appropriate for manufacturing firms.

There are certain types of incomes and expenses that do not face within the trading activities of the business but are within the ordinary activities of the firm. E.g. disposal of property, plant and equipment and other non-current assets.

The standard requires that if the above incomes and expenses are material, they can either be classified as part of the other expenses or shown separtely on the face of the income statement.

The company should give additional information about such items in the notes to the accounts.


Related Discussions:- Classifying expenses by nature-income statement

Regulated investment company, Regulated Investment Company (RIC) - Commonly...

Regulated Investment Company (RIC) - Commonly known as a MUTUAL FUND, this is a domestic corporation which acts as an investment agent for its shareholders by typically investing i

Evaluating the investment using return on capital employed, Evaluating the ...

Evaluating the investment using return on capital employed: Annual depreciation charge = 1500000/5 = $300000 Average investment = 1500000/2 = $750000 Average annual

Fund accounting and preparation of financial statements, Fund accounting an...

Fund accounting and preparation of financial statements) The scenario: At the start of the year beginning January 1, 2013, Coco City's General Fund had a cash balance of $40,000, v

The brownstone corporation''s bonds , a) What will be the value of every of...

a) What will be the value of every of these bonds when the going rate of interest is 12%? Suppose that there is only one more interest payment to be made on Bond S. Round your answ

Non-current assets for a business, WyseFinance maintains a non-current asse...

WyseFinance maintains a non-current asset register for recording information for non-current assets for a business. The business is registered for VAT. The following is a purcha

ACCOUNTING THEORY, HOW DOES ACCOUNTING THEORY INFLUENCE ACCOUNTING POLICY M...

HOW DOES ACCOUNTING THEORY INFLUENCE ACCOUNTING POLICY MAKING

Receiving order, RECEIVING ORDER It includes five main important points...

RECEIVING ORDER It includes five main important points as follows: Effect of receiving order: The consequences of the making of the receiving order are:The debtor retain

What is staff benefit fund, Q. What is Staff Benefit Fund? This is a fu...

Q. What is Staff Benefit Fund? This is a fund intended to afford certain kinds of amenities and benefits to no gazetted staff as well as to gazetted officers of the Railway ove

Common stock, The common stock of the CC Corporation has been trading in a ...

The common stock of the CC Corporation has been trading in a narrow price range of around $50 for months, and you are convinced it is going to stay in that range for the next 3 mon

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd