how to report sg a expenses
sg a has a very specific place on a company s income statement net revenue is always reported at the top then cogs is deducted to arrive at the gross margin sg a and any other expenses are listed below the gross margin the result is operating profit when these expenses are deducted from the gross margin not all expenses have been recorded when calculating operating expenses some expenses such as interest or tax expenses are reported below operating income a company may report sg a in several ways companies can aggregate all these expenses in a single sg a line or they can segregate selling costs from general and administrative costs sg a expenses as a percentage of revenue are generally high for healthcare and telecommunications businesses but relatively low for real estate and energy 1sg a expenses vs operating expensessg a expenses and operating expenses are the same in many cases both encompass expenses that are necessary to operate a business independent of the costs of manufacturing goods there are several subtle differences between sg a expenses and operating expenses larger companies often separate these types of costs into smaller specific sg a categories because it s often easier for companies to track and monitor costs in these groups management often has discretion in how many of these costs are reported on the income statement and concerning how to group these types of costs there are also a few specific accounts that may warrant specific accounting treatment that excludes them from sg a research and development costs are often not to be included in sg a depreciation costs are often reported in this section of the income statement but are excluded from sg a as well examples of sg a expensesapple reported 14 48 billion in operating expenses for the quarter as part of its q1 2024 financial reporting of this 7 70 billion was research and development and 6 79 billion was selling general and administrative 2a more in depth example is provided by amazon which reported 22 billion in sales and marketing expenses in addition to 6 67 billion in general and administrative expenses for the year ending dec 31 2022 3amazon also guides the notes to its financial statements to explain what makes up the sales and marketing categories in addition to the general and administrative categories 4