G & AE — General and Administrative Expenses

SG&A Expenses | List of Selling General & Administrative Costs

G & AE - General and Administrative Expenses

Selling, general and administrative (SG&A) expense includes all the expenses incurred in the selling of the products of the company whether direct or indirect along with the entire general and the administrative expenses during an accounting period under consideration such as advertisement expenses, sales promotion expenses, marketing salaries, etc.

SG&A Expenses are those expenses that are necessary to keep the business going. However, they are not directly included in the manufacturing cost or product cost.

SG&A Expense is included in the income statement of the company and examples include –

  1. Rent
  2. Utilities
  3. Accounting and legal expenses
  4. Sales commission paid
  5. Salaries/wages

#1 – Selling Expenses

Selling expenses are divided into direct expense and indirect expenses.

  • Direct expenses are shipping expenses of the product, sales commissions.
  • Indirect expenses are the costs that occur throughout the process of manufacturing, which include product advertising and promotional expenses, traveling expenses, and telephone bills of the sales consultants.

#2 – General & Administrative Expenses

General & Administrative Expenses are the overhead expenses of the company. They are the fixed costs incurred by the company the rent, mortgages, and insurances that need to be paid. It also includes all the salaries, wages of the workers.

SG&A expense depends on the structure of the company, whether the company has more fixed costs than variable costs and vice versa.

  • Scenario 1: If the company has more fixed costs than variable costs, and if fixed cost is high, then it needs to have high annual sales. If even there is a slight dip in revenues, then it won’t be able to cover its fixed costs. Such companies have a high break to generate profits.
  • Scenario 2: If the company has more variable costs and very low fixed costs, then it will have more competition. But they survive the phases of fall in revenue as they don’t have to think to bother about covering fixed costs.

Example #1

Now we will see an example of General & Administrative Expenses.

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Rajesh is an accountant of a startup company XYZ. He needs to calculate the Selling General & Administrative expenses, which will also include the depreciation.

Rajesh needs to include the salaries of the people of all the departments of the company and also the associated taxes. E.g., utilities, telephone, insurance, rent, repairs & maintenance, associated with the building. Also, the office equipment and the advertising expenses, commissions, travel expenses, selling and marketing supplies, and administrative and general supplies.

Once he calculates the SG&A Expenses before depreciation, he deducts the depreciation of the office building, the depreciation of the office equipment. The net $ 238500 is the amount that will be reported on the income statement.

We will now see some live examples of Selling, General & Administrative expenses of some companies. We can get the data from the income statement of the company.

Example #2

SG&A Expenses of ITC is as follows:

We can get the report from the financial tab of ITC limited. We need to choose an income statement to view the SG&A expenses.

Source: Yahoo Finance

We can see that selling, general and administrative expense is reported in the operating expenses section of the income statement.


Selling, General & Administrative expenses are vital in determining your operating income. If we subtract SG&A expenses from Gross Margin, we get Operating Income.

  • It is a key element in determining the company’s profit.
  • These costs are essential in keeping the business going.
  • Sometimes to boost profitability, these costs need to be regularized.
  • During mergers and acquisitions, these costs are a key area to look at. Several repeated positions can be cut down to bring down the SG&A costs and increase the operating income.


Excessive SG&A Expenses will hurt the profit figures of the company and, in return, reduce the shareholder’s returns.

Important Points to Note

  • SG&A is an important point to remember when calculating the profitability of a company.
  • It is all the costs that are not related to the direct manufacturing of the product.
  • It is the total of the costs which are essential for the manufacturing process advertising costs, commissions, travel costs, etc.
  • Research and development costs are not included in SG&A expenses.

The other important point to take note is regarding the situations where there are overspending and the ways it can be reduced.


  • When such expenses increase too much without a rise in sales or a drop in sales, then it is very much important to reduce the SG&A costs.
  • High Selling, General & Administrative costs decrease the profitability of the shareholders.

Ways to Reduce SG&A Expense

  • Restructuring and cost-cutting are required to reduce the expenses of Selling, General & Administrative costs.
  • Reduction of non-sales personnel salaries, cut in travel costs will help to regularize these costs.


Selling, General & Administrative expenses are a major driver of operating income. As we know, Gross Margin – SG&A = Operating Income, also referred to as EBIT (Earnings before interest taxes)

Therefore an excessive SG&A expense leads to a decrease in EBIT. But these expenses are also important to carry on a day to day activities. Therefore a balanced amount should be spent keeping in mind the structure of the company (more fixed costs than variable costs and vice versa).

This article has been a guide to what is SG&A Expense and its definition. Here we discuss the list of Selling, General & Administrative Expenses along with practical examples, its importance, and disadvantages. You can learn more about Accounting from the following article s-

Источник: https://www.wallstreetmojo.com/sg-a-expenses/

General Service Staff (G1 — G7)

G & AE - General and Administrative Expenses

The functions in the General Service and related categories include administrative, secretarial and clerical support as well as specialized technical functions such as printing, security and buildings maintenance.

There are jobs in all the eight job networks: management and operations support; economic and social development; political, peace and security; information systems and communication technology; legal; public information and external relations; conference management; and safety and security.

The work carried out by General Service staff supports the functioning of the Organization and is typically procedural, operational or technical in nature. The work in these categories ranges from routine duties to varied and complex assignments.

The knowledge of the subject matter and higher-level skills are generally developed through long experience and familiarity with applicable procedures, regulations and precedents or projects of the Organization in a narrow technical field or in an administrative support activity.

The higher the level of the job, the more complex the functions become along with higher levels of responsibility.

What is United Nations looking for in a candidate for a G position?

Because General Service staff support the functioning of UN, we are looking for candidates who achieve results in operational, procedural and technical capacities.

A commitment to making UN successful is essential! We want someone who is analytical and can handle routine to complex tasks with dedication.

We also want an excellent teammate who embraces diversity and is eager to provide creative ideas for improving UN processes.

What education and work experience do I need for General Service (G) category positions?

Completion of secondary (high school) education is a requirement.

These are the work experience requirements for each level:G1 — No work experience requiredG2 — Minimum of 2 years of work experienceG3 — Minimum of 3 years of work experienceG4 — Minimum of 4 years of work experienceG5 — Minimum of 5 years of work experienceG6 — Minimum of 6 years of work experience

G7 — Minimum of 7 years of work experience

Who is eligible to be considered for a G position?

General Service personnel are recruited locally from the area in which a office/duty station is located. They can be of any nationality, but should be legally permitted to work in the country where the office/duty station is located.

Staff in the General Service and related categories are generally recruited locally from the area in which the particular office is located but could be of any nationality. As a result, such staff members are usually not expected to move between different duty stations.

At the Organization’s Headquarters in New York, jobs such as drivers, electricians, building management and printing staff fall under the related category called Trades and Crafts (TC).

Similarly, Security Officer jobs in New York are advertised as a separate category called Security (S), and tour guides in New York as Public Information Assistants (PIA).

Another related category is the Language Teachers (LT), for which positions can be found only in New York and Geneva. In all other duty stations these jobs are included, and listed, under General Service.

Currently, the following General Service Tests are administered in the UN Secretariat (some of them in New York only):

  • The Global General Service Test (GGST)
  • The Security Officer Test

What qualifications do I need to work in the General Service and related categories?

The following requirements have to be met to be considered for General Service jobs:

Источник: https://uncareer.net/frontend/page/view?alias=General+

SG&A Expense (Selling, General & Administrative) — Guide, Examples

G & AE - General and Administrative Expenses

SG&A includes all non-production expenses incurred by a company in any given period. This includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. On occasion, it may also include depreciation expense, depending on what it’s related to.

In an income statementIncome StatementThe Income Statement is one of a company's core financial statements that shows their profit and loss over a period of time. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non-operating activities.

This statement is one of three statements used in both corporate finance (including financial modeling) and accounting., gross profitGross ProfitGross profit is the direct profit left over after deducting the cost of goods sold, or «cost of sales», from sales revenue.

It's used to calculate the gross profit margin and is the initial profit figure listed on a company's income statement. Gross profit is calculated before operating profit or net profit.

less SG&A (and depreciation expense) equals the operating profit, also known as earnings before interest and tax (EBIT)EBIT GuideEBIT stands for Earnings Before Interest and Taxes and is one of the last subtotals in the income statement before net income.

EBIT is also sometimes referred to as operating income and is called this because it's found by deducting all operating expenses (production and non-production costs) from sales revenue..

Source: amazon.com

Image Source: CFI reading financial statements course.

Some firms classify both depreciation expense and interest expenseInterest ExpenseInterest expense arises a company that finances through debt or capital leases. Interest is found in the income statement, but can also be calculated through the debt schedule.

The schedule should outline all the major pieces of debt a company has on its balance sheet, and calculate interest by multiplying the under SG&A.

If this is the case, then gross profit less SG&A equals pre-tax profit, also known as earnings before taxes (EBT)Earnings Before Tax (EBT)Earnings Before Tax (EBT), is found by deducting all relevant operating expenses and interest expense from sales revenue.

Earnings Before Tax is used for analyzing the profitability of a company without the impact of its tax regime.  This makes companies in different states or countries more easily comparable.

Selling Expense

The selling component of this expense line is related to the direct and indirect costs of generating revenue (from selling products or services).

Direct expenses are those incurred at the exact point-of-sale for a product or service.  Examples of direct selling expenses include transaction costs and commissions paid on a sale.

Indirect selling expenses are those that are incurred either before or after the sale is made and examples include salaries, benefits, and wages for salespeople, travel, and accommodation expenses.

General & Administrative (G&A) Expense

G&A expenses are the overhead costs of a business, many of which are fixed or semi-fixed. These costs don’t relate directly to selling products or service, but rather to the general ongoing operation of the business.

The most common examples are rent, insurance, utilities, supplies, and expenses related to company management, such as salaries of executives, admin staff, and non-salespeople.

Forecasting SG&A

SG&A can be forecasted through any of the following methods: as a percentage of sales revenueSales RevenueSales revenue is the income received by a company from its sales of goods or the provision of services.

 In accounting, the terms «sales» and «revenue» can be, and often are, used interchangeably, to mean the same thing. Revenue does not necessarily mean cash received.

, a growth rate over the last period, or as a fixed dollar value.

If SG&A is a consolidated, one-line item, the analyst must use discretion to select one of these (or other) methods to account for all the various expenses baked into that one line item.

Sometimes, SG&A will be a section, with items broken out in individual lines. If this is the case, then different line items will have differing forecast methods. For example, rent most ly will be a fixed dollar value every period. Advertising expenses, on the other hand, will vary with the strategic decisions a company makes during the given period.

The screenshot above is taken from CFI’s financial modeling courses, which cover forecasting SG&A expenses.

SG&A Example

Let’s use Amazon as an example of what’s included in this income statement line item. Below is a quote from Amazon’s 2016 annual report.

“General and administrative expenses primarily consist of payroll and related expenses; facilities and equipment, such as depreciation expense and rent; professional fees and litigation costs; and other general corporate costs for corporate functions, including accounting, finance, tax, legal, and human resources, among others.”

Additional resources

Thank you for reading this guide to SG&A.

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Morgan, and Ferrari certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below may be useful to you:

  • Forecasting the income statementProjecting Income Statement Line ItemsWe discuss the different methods of projecting income statement line items. Projecting income statement line items begins with sales revenue, then cost
  • Analysis of financial statementsAnalysis of Financial StatementsHow to perform Analysis of Financial Statements. This guide will teach you to perform financial statement analysis of the income statement,
  • What is EBITDA?EBITDAEBITDA or Earnings Before Interest, Tax, Depreciation, Amortization is a company's profits before any of these net deductions are made. EBITDA focuses on the operating decisions of a business because it looks at the business’ profitability from core operations before the impact of capital structure. Formula, examples
  • Financial modelingFinancial ModelingFree financial modeling resources and guides to learn the most important concepts at your own pace. These articles will teach you financial modeling best practices with hundreds of examples, templates, guides, articles, and more. Learn what financial modeling is, how to build a model, Excel skills, tips and tricks

Источник: https://corporatefinanceinstitute.com/resources/knowledge/accounting/what-is-sga/

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