Cost of Goods For Resale
Cost of goods purchased for resale includes purchase price as well as all other costs of acquisitions. This cost should reflect any discounts. Additional costs may include freight paid to acquire the goods, customs duties, sales or use taxes not recoverable paid on materials used, and fees paid for acquisition. For financial reporting purposes such period costs as purchasing department, warehouse, and other operating expenses are usually not treated as part of inventory or cost of goods sold. For U.S. income tax purposes, some of these period costs must be capitalized as part of inventory. Costs of selling, packing, and shipping goods to customers are treated as operating expenses related to the sale. Both International and U.S. accounting standards require that certain abnormal costs, such as those associated with idle capacity, must be treated as expenses rather than part of inventory.
Value added tax is generally not treated as part of cost of goods sold if it may be used as an input credit or otherwise recoverable from the taxing authority.
Read more about this topic: Cost Of Goods Sold
Famous quotes containing the words cost of, cost and/or goods:
“It is not enough for theory to describe and analyse, it must itself be an event in the universe it describes. In order to do this theory must partake of and become the acceleration of this logic. It must tear itself from all referents and take pride only in the future. Theory must operate on time at the cost of a deliberate distortion of present reality.”
—Jean Baudrillard (b. 1929)
“Now that is the wisdom of a man, in every instance of his labor, to hitch his wagon to a star, and see his chore done by the gods themselves. That is the way we are strong, by borrowing the might of the elements. The forces of steam, gravity, galvanism, light, magnets, wind, fire, serve us day by day and cost us nothing.”
—Ralph Waldo Emerson (1803–1882)
“those far-fet helps be such
As do bewray a want of inward touch,
and sure at length stolen goods do come to light.
But if, both for your love and skill, your name
You seek to nurse at fullest breasts of Fame,
Stella behold, and then begin to indite.”
—Sir Philip Sidney (1554–1586)