Hello Sir,
If the question does not mention where the costs go to, such as depreciation, impairment or loss on disposal and I put it in operating costs but the examiner answer is put in the cost of sales, will it be no mark at all?
or presentation error,
such as putting the redeemable preference shares into the equity section rather than NCL?
Thank you.
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Cost classification
Hi,
You shouldn't lose marks if putting the costs in the incorrect category, but it would depend on the information given in the question. If it is clear where it should be classified then it should go in the correct place and if you don't put it there then you would lose marks.
You would lose marks if you incorrectly classified the redeemable preferences shares as a equity, as there is an obligation and hence have characteristics of debt and should be shown as a liability.
Thanks
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