Once a recovery meets the requisite recognition threshold (see FSP 23.5), it should be recognized in the income statement. In particular, if the insurance recoveries relate to property damage, the proceeds should not be recorded as a reduction of the cost to rebuild or replace the insured asset. Business interruption insurance recoveries, even if based in part on lost revenue, should not be presented as revenue from contracts with customers as they would not meet the definition of revenue within ASC 606. Judgment should be applied to determine what presentation is most meaningful. However, income statement classification guidance is not provided for many other types of claims (including involuntary conversions). ASC 220-30-45-1 indicates that reporting entities have a choice in how to classify business interruption insurance recoveries as long as the classification is not contrary to other US GAAP. Types Formula SG&A vs Other Expenses Examples SG&A Ratio Takeaway Selling, general, and administrative (SG&A) expenses are a company’s overhead costs for its day-to-day operations, such as office supplies and salaries. ASC 410-30-45-4 requires credits arising from recoveries of environmental losses to be classified in the same line items as the related loss. The COM, actual interest cost, and home market packing are based on information in the section D COP/CV questionnaire response. The classification of insurance proceeds in the income statement depends on the nature of the insurance claim. Transfers and servicing of financial assets Revenue from contracts with customers (ASC 606) Selling expenses are all the costs associated with sales or. Loans and investments (post ASU 2016-13 and ASC 326) Selling Expenses Administrative expenses are the costs of running a company. Many selling, general & administrative expenses are also overhead costs. Investments in debt and equity securities (pre ASU 2016-13) Selling, general and administrative expenses This can include anything from sales, advertising and marketing to distribution costs to research and development. Insurance contracts for insurance entities (pre ASU 2018-12) Insurance contracts for insurance entities (post ASU 2018-12) IFRS and US GAAP: Similarities and differences Business combinations and noncontrolling interestsĮquity method investments and joint ventures
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