This should come above Net Income. Right?
I think its Infrequent but not Unusual item so not extraordinary.
This is an employee wage and benefit cost which is usually part SG&A. Therefore above the NI and part of operating expenses (at least this is what I think).
Is it SG&A?
I thought its restructuring cost which I am not sure is SG&A.
Yes, I believe so…
This excerpt taken from the CCO DEF 14A filed Apr 30, 2009.
Selling, General and Administrative Expenses (SG&A)
2008 v. 2007
SG&A increased $68.4 million during 2008 compared to 2007. Approximately $23.7 million of this increase occurred during the fourth quarter primarily as a result of severance associated with the restructuring plan. Our International business contributed approximately $41.9 million to the increase primarily from movements in foreign exchange of $11.2 million and an increase in severance in 2008 associated with the restructuring plan of approximately $20.1 million. Our Americas business’ SG&A increased approximately $26.4 million largely from increased bad debt expense of $15.5 million and an increase in severance in 2008 associated with the restructuring plan of $4.5 million.
The restructuring charge itself is an unusual/infrequent item, but the severance pay component is part of SG&A. It’s not only during a restructuring that people are receive severance - involuntary termination, termination for good reason, constructive termination etc. may also trigger severance pay.
ok i think its too much to digest right now but i’ll take it that it comes above net income.
will have to come back to this thread after exam 