Where to put cost of sales on FRS105 P&L

Commission is not Raw materials or consumables on an FRS105 statutory Profit & Loss account

Didn't find your answer?

My client is a small general insurance brokerage paying comission to the intermediary company to which the it is affiliated.  This commission was Cost of sales in the 2016 GAAP profit and loss account.  In the micro entity accounts the Cost of sales line is named Cost of raw materials and consumables.  It would seem that this wording is statutory even though in plain English an insurance commission seems to be neither raw materials nor consumables.  Should I put the commission in the Raw materials and consumables line even though this seems a nonsense, or move it down to Other Charges section of the profit and loss account?  The commission is a third of the turnover so it is a material item.

Replies (3)

Please login or register to join the discussion.

By Duggimon
21st Jun 2017 09:48

Were Sherlock Holmes an accountant he would no doubt say, once you have eliminated the impossible account codes, whatever remains, no matter how improbable, must be where you put the expense.

Thanks (3)
avatar
By newstarter01
21st Jun 2017 10:51

Occam's Razor

Thanks (0)
By Tim Vane
21st Jun 2017 10:52

Sherlock Holmes would not make a good accountant as he was always on the fiddle.

Thanks (0)