Financial Education

Selling, general, and administrative (SG&A) expenses represent most operating expenses (other than cost of sales), including employee salaries, pension costs, marketing costs, insurance, rent, and depreciation. While the company has accounting records of these items in more detail, they are usually grouped together for external reporting purposes. Despite the fact that analysts would prefer more detailed disaggregated information, many companies are reluctant to provide this information for competitive reasons. According to Accounting Trends and Techniques (an annual publication of the AICPA) for 1998, more than half of the companies surveyed (600) reported SG&A as a single line item (not considering research and development and interest expenses discussed below). For those companies that provided details of individual expenses, the most common were:

• Selling.
• Advertising.
• Doubtful accounts (uncollectable receivables).
• Taxes other than income taxes.
• Maintenance and repairs.

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See also:

Research and Development Expense

The Defensive Interval

Accounting for Defined Contribution Pension Plans

What is Depreciation and Amortization Expense?

Determining Inventory Cost