Dear Sir,
I need to calculate "Operating Profit" for a Manufacturing Company. So, please let me know whether the "Provision for Taxation" debited to Profit & Loss Account is a Operating Expenses or Non-Operating Expenses.
Awaiting for your earliest reply in this regard.
Many thanks in advance,
Ramu
Its Non Operating Profit.
Even Depreciation & Interest are Also Not Operating Expenses.
and Depreciation if Calculated on Production Basis I Mean Variable Then Only It Will Be Treat as Operating.
For the purpose of calculating Operating Profit only Cost of goods sold and other Operating expenses i.e Admn. exp., Selling & distributation exp. are considered.
Formula is Sales-(COGS+Admn. exp+S&D exp.)
its wl nt be included in operating profit.....its a NON OPERATING EXPENSE....
expenses incurred in operation of activity.....is operating exp. n prov for tax is that we r making provision...so its a liablity
operating expenses are those expeses which are incurred in order to affect the production or business...provsion for taxation is not an expense which can be related to production directly and also it is the below the line item and not treated as operating expense.
CAclubindia
