I have a new client who are a music band, selling cd's and touring the country. I understand that the costs associated with producing the cd's are a cost of sale but am having a little trouble identifying the cost of sales when relating to touring.
For example: live sound engineers, costs incurred paying staff to help set up etc. Surely the cost of everything associated with the tour would be recouped in the ticket prices??
If someone could give me some examples of COS in this area it would be gratefully received!
Everything that can be directly attributed spacifically to a given income generating event is a cost of sale.
Everything else is an expense.
Personal Travel and subsistence are the general exceptions to that rule in that they are almost always an expense regardless as to whether they are traceable to a specific job.
An exception to the above would be a tour bus hired specifically for a tour would be a directly attributable cost of sale where the band travelling in their own cars to gigs would be an expense.
Conversely travel and subsistence of contractors hired for a specific job (i.e. sound engineers) would be a cost of sale even where their own transport is used as it is directly tracable.
Sounds like an interesting gig (excuse the pun) Wendy
welcome to the forum,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thank you very much for your swift response Shaun.
As someone in practice (and relatively new to the practice world) I find that COS can be somewhat of a tricky area as our clients differ greatly. I have also realised there are a lot of grey areas too!
