I - Cost of Sales: General principles 

1. Regulatory framework and definitions

1.1. Regulatory framework

• IAS 18 - Revenue

1.2. Definition

Cost of sales (Cost of Goods Sold)

Valuation of the cost of products (incl. services) sold by the entity when going out of inventory (at the time of the sale).

The cost of sales is composed of variable and non-variables costs

Non-variable cost of sales (non-proportional) includes:

• Non-variable cost of sales, excluding depreciation - actual
• Production depreciation

Contribution Margin

Is calculated by deducting the following from "Net sales & Other revenues on activities":

• Variable selling expenses; and
• Variable (proportional) cost of sales

Gross Margin (Product Margin Sales)

Is calculated by deducting NON-PROPORTIONAL COSTS from the Contribution Margin.