Our company recently engaged in import business, resulting in import agency fees. We haven’t dealt with the accounting of such fees before and are unsure which subject to record them under. Should they be included in procurement costs, sales expenses, administrative expenses, or something else? We’d appreciate help from someone knowledgeable in finance, preferably with an explanation. Thank you!
The company imports goods and incurs fees for customs clearance through an agency company. It is uncertain which subject this should be recorded in, and the inquiry is whether it should be recorded in the cost of goods, or in administrative or selling expenses, as well as the impact of different recording methods on the financial statements. The best answer states that if it is a necessary expense to bring the goods to a usable or salable state, it should be recorded in the cost of goods; if it is related to sales activities, it should be recorded in selling expenses; if it is related to daily management, it should be recorded in administrative expenses, and different recording methods have an impact on the statements.
The company incurred import agency fees for importing goods and wants to know which accounting subjects they should be included in. The best answer states that if directly related to specific imported goods, they can be included in procurement costs; if not directly attributable to specific goods, they can be included in "sales expenses" or "administrative expenses." Actual practice should be determined based on the company's financial policies and business substance.
I plan to import valves through an agency and want to know the specific value of the import tariff, as well as the differences in tariffs for different types of valves, special policies and precautions for agency import tariffs. The best answer points out that the import tariff for valves varies depending on the type, material, etc. The tariff for ordinary cast iron or steel valves is about 7% - 10%. The tax rate needs to be determined according to the customs code. When importing through an agency, accurate declaration is required. If it complies with the free trade agreement, low tariffs or zero tariffs can be enjoyed.
The company is involved in import and export business and has incurred agency fees, but is unsure which accounting subject to use. It asks whether it should be recorded under sales expenses, administrative expenses, or others. The best answer indicates that if it is directly related to sales, it should be recorded under sales expenses with a detailed sub-account; if related to daily management, it should be recorded under administrative expenses; if incurred for a specific project, it can be included in the project cost, depending on the actual business situation.
The company incurred fees by hiring an export agency but is unsure which accounting account to record them under, questioning whether it should be selling expenses, administrative expenses, or others. The best answer indicates that export agency fees are generally recorded under selling expenses, as they are closely related to sales, similar to consignment sales commissions, being necessary expenditures to achieve sales. When recording, debit "Selling Expenses - Export Agency Fees" and credit the payment account.
Our company plans to find an agent to import goods. We are confused about whether to write the information of the agent company or our own company on important documents such as bills of lading and invoices, fearing that it will affect customs clearance, goods pickup and the ownership of goods. The best answer is that the subject of document filling depends on the situation. For example, the bill of lading can have dual consignors, the invoice should be written according to the paying subject, the operating unit on the customs declaration form should be the agent, and the consigning unit should be the entrusting party. Reasonable filling can clarify the responsibilities and rights of each party and avoid disputes.
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Professional consultant answers
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Import agency fees are generally determined by their purpose and nature. If the fees are incurred for purchasing goods and can be directly attributed to the inventory being procured, they should typically be included in the procurement cost of the inventory. This approach aligns with the basic principles of inventory cost accounting and ensures greater accuracy in inventory costs.
For example, agency fees paid for importing raw materials should be included in the cost of the raw materials.
If the import agency fees are closely related to the sales process, such as fees incurred to promote the sale of imported goods, they can be recorded as sales expenses.
If the import agency fees cannot be clearly linked to procurement or sales and are part of the company’s routine operational management, it may be more appropriate to include them in administrative expenses. In short, the decision should be based on the specific business context.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
If the imported goods are used for production, the import agency fees should follow the cost of the goods and be recorded under production cost-related subjects, ultimately allocated to the product cost.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
When the import agency fees are relatively small and have minimal impact on costs, they can be recorded as administrative expenses for simplified accounting, as this is convenient and does not significantly affect the overall financial data.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
If the import business is primarily for sales, and the agency fees are closely tied to sales promotion, recording them as sales expenses is a good choice, as it better reflects the relationship between expenses and revenue.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
In special cases, such as when imported goods are used for R&D projects, the import agency fees can be considered part of R&D expenses to accurately account for R&D costs.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
If the agency fees are incurred for a specific contract, they can be directly included in the cost of that contract, making cost accounting clearer and more accurate.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
If the import agency fees are related to the installation and debugging of imported equipment and are incurred to bring the equipment to its intended usable state, they should be included in the fixed asset cost.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
If the imported items are low-value consumables, the import agency fees can be recorded under the relevant subjects for consumables, along with the low-value items.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
If the imported goods are for leasing, the import agency fees should follow the leasing business and be recorded as other business costs.