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FRS105 direct wages

FRS105 direct wages

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Should direct wages be shown under 'Staff costs' or 'Other charges' under FRS105?

Using VT transaction and popping them in under 'Direct labour' pushes them to 'Other charges' in VT Accounts so I assume that this is correct?

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By lionofludesch
17th Feb 2020 18:59

Wages are staff costs.

However, if you have some subcontractors, that's Other Costs.

It's not how I'd've done it, especially for a builder, but I can see the flawed logic. Obviously, coupled with that, is the fact that FRS 105 accounts are carp from start to finish.

What do you have to choose from, besides Direct Labour ? I suspect that this is your problem.

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By atleastisoundknowledgable...
18th Feb 2020 08:10

I’d put them under staff costs myself, but each to their own.

whilst training, I was told (in an ACCA course lesson) that 100 accounts with exactly the same data will give you 100 different sets of accounts - figures & discloses. A slight exaggeration, but the point is valid.

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By ShayaG
18th Feb 2020 11:35

FRS105 has no directly corresponding concept of direct costs "Cost of raw materials and consumables" doesn't correspond precisely to direct costs.

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By paulhammett
18th Feb 2020 17:12

I’d put them in staff costs and just ensure that you are consistent year on year.

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