Canada Cost of Goods Sold for Various Company Sectors

[benito]

We have been learning that COGS are the direct costs for products from our university studies. For example, the cost of manufacturing a smart phone may include raw materials (chips, screen, etc.) and direct labor costs. However, there are so many other types of company sectors in the real world that our previous studies didn't cover. So, how are we going to record the COGS for these sectors? Below are some popular sectors:

1. Education
2. Design
3. Insurance
4. Hotel/Hospitality
5. IT (software) - we can have the costs such as salaries for programmers/designer fees/equipment/testers of developing the software. But these are the fees for the development stages before launching the software. However, the software can be sold for few years.
6. IT (Cloud service) - we can have the costs such as salaries for programmers/designer fees/equipment/testers of developing the cloud service. But these are the fees for the development stages before launching the service. However, the cloud can be subscribed for many years.
7. IT (Payment platform. e.g. apple pay, google pay, etc.)

 

[DrStrangeLove]

Simple answer: you don't. Not every industry holds and sells inventory-like assets. Costs of services are generally expensed as incurred, not capitalized and amortized.