11-24-2016, 02:57 AM
I am auditing a software consultancy company which is IFRS reporting.
Company has 100 consultants/developers whose payroll cost should be part of cost of sales.
However the company is allocating Bench costs/idle time (time when developer has no chargeable work and they are sitting idle in the office) to administrative costs.
Company is of the view that as the developer is not contributing to any sale during this team therefore it should not be classified as cost of sale.
Can you please confirm if that is correct treatment.?
Company has 100 consultants/developers whose payroll cost should be part of cost of sales.
However the company is allocating Bench costs/idle time (time when developer has no chargeable work and they are sitting idle in the office) to administrative costs.
Company is of the view that as the developer is not contributing to any sale during this team therefore it should not be classified as cost of sale.
Can you please confirm if that is correct treatment.?