SELLING AND DISTRIBUTION OVERHEADS

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....ication, measurement and assignment of Selling and Distribution Overheads, for determination of the cost of sales of product or service, and the presentation and disclosure in cost statements. 2. Objective The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Selling and Distribution Overheads with reasonable accuracy. 3. Scope This standard should be applied to cost statements, which require classification, measurement, assignment, presentation and disclosure of Selling and Distribution Overheads including those requiring attestation. 4. Definitions The following terms are being used in this standard with the meaning specified. 4.1 Abnormal cost: An....

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.... 4.6 Indirect expenses: Expenses which cannot be directly attributed to a particular cost object. 4.7 Marketing Overheads: Marketing overheads comprise of selling overheads and distribution overheads. 4.8 Overheads: Overheads comprise costs of indirect materials, indirect employees and indirect expenses. 4.9 Selling Overheads: Selling overheads are the expenses related to sale of products or services and include all indirect expenses incurred in selling the products or services. For Example: 1. Salaries of sales personnel 2. Travelling expenses of sales personnel 3. Commission to sales agents 4. Sales and brand promotion expenses including advertisement, publici....

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....all be excluded from the Selling and Distribution Overheads. 5.7 Any demurrage or detention charges, or penalty levied by transportation or other authorities in respect of distribution activity shall not form part of the Selling and Distribution Overhead. 5.8 Penalties and damages paid to statutory authorities or other third parties shall not form part of the Selling and Distribution Overheads. 5.9 Credits / recoveries relating to the Selling and Distribution Overheads including those rendered without any consideration, material and quantifiable, shall be deducted to arrive at the net Selling and Distribution Overheads. 5.10 Any change in the cost accounting principles applied for the measurement of the S....

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....ution Overheads incurred in foreign exchange. 3. Cost of Selling and Distribution services rendered to related parties^[2]. 4. Any Subsidy / Grant / Incentive and any such payment reduced from Selling and Distribution Overheads. 5. Credits / recoveries relating to the Selling and Distribution Overheads. 6. Penalties and damages excluded from the Selling and Distribution Overheads. 8.2 Disclosures shall be made only where material and significant. 8.3 Disclosures shall be made in the body of the Cost Statement or as a foot note or as a separate schedule. 8.4 Any change in the cost accounting principles and methods applied for the measurement and assignment of the Selling and Dist....