Can we treat all technical staff salaries under Admin Expenses ?

If you have already separated the salaries as per the departments then it is not right to treat the technical staff under the admin expenses. Normally these kind of cost centers are established for better management reporting. It can also effect the net income as you can only expense out the COGS part of FOH(technical salaries) and if you have some unsold units in inventory then un-apportioned expenses becomes part of balance sheet rather then P&L (Matching Principle).

Best Regards

It would be more appropriate to classify expenses based on its type rather than putting the entire thing to admin expense.

For example, lets take a hotel, costs which are directly relevant to the revenue such as housekeeping, kitchen staff would be better off classified under cost of sales. Other staff costs like finance, IT staff salary should go under admin expenses. Sales and marketing salary would go under selling & distribution costs. This would give a more meaningful and better presentation of the Income Statement.

Btw, remember this is the same thing we do to depreciation :)

We can classify the Expenses just like salaries etc on the activity based principal,

(THUMB RULE).

Becase our appropriation and classification not only hits a lot of areas in Financial Statements, but ultimately affects our decision making process.

Hence, Technical staff salaries (related to core activity of the business) must be reported in COGS or COSR (cost of services rendered) section. It must be in net profit slab.

It will never be wise to report them as Admin Expenses.

Good, your question was good and more conceptual. Thanks

Thanks Sir. It's Really Informative and relative.