As far a I know, the depreciation expenses of PP&E of production companies (rather than pure sales companies) are embedded in the inventory and the inventory is converted into COGS on income statement when the inventory is sold.
Is it that depreciation expense shown on the income statement of production companies purely the depreciation expense of the equipment used in SG&A ?
Any response ?
Never encountered this before; if I had, I’d have been happy to give you my thoughts.
It this in the curriculum?
http://blog.accountingcoach.com/depreciation-expense/
Seems like a legit source…this is just an fyi though. My advice to you would be to focus on the material and whats in the curriculum. Level 1 isnt nearly that technical. I would strictly assume that all depreciation related to pp&e is expensed in the income stmt as depreciation unless otherwise stated and move on.
Thank you so much !
I’ve only seen depreciation in regard to long-lived assets, not inventory, in the KS and CFAI material.